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Jackpot! A legal history of Indian gaming in
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Aaron Peardon
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JACKPOT! A LEGAL HISTORY OF INDIAN GAMING IN CALIFORNIA
by
Aaron Mitchell Nicholas Peardon
Bachelor of History
Pepperdine University
1998
A thesis submitted in partial fulfillment
of the requirements for the
Master of Arts in History
Department of History
College of Liberal Arts
Graduate College
University of Nevada, Las Vegas
May 2011
Copyright by Aaron Peardon 2011
All Rights Reserved
THE GRADUATE COLLEGE
We recommend the thesis prepared under our supervision by
Aaron Peardon
entitled
Jackpot! A Legal History of Indian Gaming in California
be accepted in partial fulfillment of the requirements for the degree of
Master of Arts in History
Maria Raquel Casas, Committee Chair
David Tanenhaus, Committee Member
William Bauer, Committee Member
John Tuman, Graduate Faculty Representative
Ronald Smith, Ph. D., Vice President for Research and Graduate Studies
and Dean of the Graduate College
May 2011
ii
ABSTRACT
Jackpot! A Legal History of Indian Gaming in California
by
Aaron Peardon
Dr. Maria Raquel Casas, Examination Committee Chair
Professor of History
University of Nevada, Las Vegas
Indian Gaming has transformed the economic, political, and sociological
landscape of California. The growth of Indian casinos has had a profound impact on both
Indian and non-Indian communities alike. California tribes took the lead in legalizing
Indian Gaming throughout the nation. The efforts of California tribes in the legislative
and political process have enabled many tribal groups to rise out of poverty and to gain
prosperity that would otherwise be impossible to achieve. They have also brought
increased revenue to local communities and have provided thousands of jobs to all
Californians.
This thesis discusses the historical relationships between Native American groups
and the various government entities with which they have interacted. Starting with a
general overview of the legal history of major legislative and judicial decisions affecting
all aspects of tribal-government relations, the topics narrow to a discussion of the direct
impact of court decisions both major and minor on Indian Gaming throughout the United
States. These decisions led to congressional action including the Indian Gaming
Regulatory Act which provided the foundation for legalized Indian Gaming.
California Tribes were at the forefront of these decisions, and as the legal playing
field continued to change, native groups adapted by taking their cause to the citizens of
iii
their state. The thesis provides a detailed explanation of the compacting process, a
discussion of tribal struggles through the use of the direct initiative, and an illustration of
how this battle led to unforeseen benefits for tribal enterprises. The thesis concludes in
the year 2009 with a discussion of the current status of Indian Gaming in California and
future concerns that face native governments in their ongoing effort towards greater tribal
sovereignty.
iv
TABLE OF CONTENTS
ABSTRACT....................................................................................................................... iii
PREFACE .......................................................................................................................... vi
INTRODUCTION ............................................................................................................. xi
CHAPTER 1
A HISTORY OF TRIBAL-GOVERNMENTAL RELATIONSHIPS . 1
CHAPTER 2
THE BIRTH OF INDIAN GAMING ................................................ 46
CHAPTER 3
CABAZON AND THE INDIAN GAMING REGULATORY ACT . 79
CHAPTER 4
THE COURTS CONTEMPLATE IGRA ........................................... 99
CHAPTER 5
CALIFORNIA .................................................................................. 124
CHAPTER 6
SCHWARZENEGGER AND THE FUTURE ................................. 159
APPENDIX A
CALIFORNIA’S GAMING TRIBES ............................................... 176
APPENDIX B
GROWTH IN INDIAN GAMING ................................................... 179
APPENDIX C
TRIBAL GAMING REVENUES 2004-2008 .................................. 180
APPENDIX D
TRIBAL GAMING REVENUES BY REGION 1999-2008 ............ 182
APPENDIX E
CALIFORNIA STATE LOTTERY REVENUES 2000-2008 ......... 186
APPENDIX F
STATEWIDE TRIBAL GAMING DEVICE COUNT 2006 ........... 187
APPENDIX G
CALIFORNIA REVENUE SHARING TRUST FUND RECIPIENTS
MAY 2009 ........................................................................................ 189
APPENDIX H
TRIBES CONTRIBUTING TO SPECIAL DISTRIBUTION FUND
NOV. 2008 ........................................................................................ 194
APPENDIX I
TRIBES CONTRIBUTING TO THE GENERAL FUND
MARCH 2009 ................................................................................... 196
BIBLIOGRAPHY ........................................................................................................... 197
VITA ............................................................................................................................... 205
v
PREFACE
Driving through the California desert on a warm spring afternoon, I begin to take
note of the landscape. Among the unfinished housing projects, evidence of urban sprawl
and an uncontrolled population boom that is forcing people further away from the cooler
coastal areas and into the hotter, yet more affordable desert, are countless numbers of
billboards beckoning people to a variety of casinos. It is what one might expect, and is
probably very familiar to anyone who has traveled Interstate 15 North beyond Barstow
and towards the glistening lights of Las Vegas; however, this is not the 15 North. It is
Interstate 10 East. These billboards are not for the Luxor, Flamingo, or Circus Circus in
Las Vegas, but for Fantasy Springs, Agua Caliente, Pechanga, and Saboba. These
billboards, mixed among the ominous steel windmills that bring thoughts of a future that
might resemble science fiction, are a true sign of California’s present and future. The
signs promise entertainment and excitement to all who travel Interstate 10, including
Southern California’s large Asian population, as is evidenced in an advertisement for
Fantasy Springs Casino that is written in several different Asian and Pacific languages. It
is well known throughout Southern California that the Asian population is one of the
largest patron groups to the gaming industry. Yet, it is clear that gaming is not simply
attractive to the Asian population of California, but to all types of Californians regardless
of race, ethnicity, or sex. It is also apparent that Indian gaming has gained a foothold in
California, one that was not easily obtained, but one that is clearly here to stay, and is
destined to be an integral part of California’s future. This realization crosses my thoughts
and my words as I travel Interstate 10 towards the Cabazon Reservation in Indio,
California.
vi
As we continue our drive towards Indio, I begin to list each of the Indian casinos
that I can think of off the top of my head. There is Sycuan, Barona, Viejas, Harrah’s
Rincon, Pauma, and Pala in the San Diego County area. Pechanga, Saboba and San
Manuel are all relatively close to the Riverside area, while Fantasy Springs (Cabazon),
Agua Caliente, Spa, Morongo, and Trump 29 are in the vicinity of resort-centered Palm
Springs. I am almost taken back at the sheer number of casinos that have seemed to
simultaneously sprout up throughout Southern California. Realizing that I have most
likely neglected to name every Indian casino in Southern California, I ask myself; “Are
the majority of these casinos new or are they simply becoming more prominent and thus,
more visible?” I do not recall there being so many casinos when I left for Nevada in
1998. It is now March of 2003, and as I am approaching the Cabazon Reservation, I
realize that I am also approaching the culmination of five years of delays and frustrations.
After many setbacks and thoughts of simply giving up, I was finally coming to the point
where I could actually begin to write this thesis.
Pulling into the parking lot of Fantasy Springs Casino, I notice the stark contrast
as compared to a typical Las Vegas casino. The structure is relatively small containing
the casino itself and an adjoining bowling alley, but lacking are any accommodations for
overnight stays except for a small motel down the street. This layout is typical of many
California Indian casinos; however, in recent years, some of the more successful
enterprises such as Pechanga and Pala have built, or are currently building, resort-style
hotels that rival those of Las Vegas. The second impression that strikes me is the ease in
which Fantasy Springs can be accessed in comparison to other properties that I have
visited in California. Many Indian casinos are located on remote reservations that are
vii
often difficult to access. Some are located along two lane highways that, until recently,
have seen little traffic. Such is the case with Casino Pauma in northern San Diego
County. It is located in the middle of a large orange grove off of State Route 76.
Without the few signs telling one to “turn left ahead,” one would most likely drive past
without ever realizing that, mixed among the citrus, were people wagering thousands of
dollars. In comparison to Pauma, Fantasy Springs is adjacent to Interstate 10, which can
attract the eyes of anyone travelling towards Phoenix or Los Angeles.
We park next to the entrance of the Indio Pow Wow, a conglomeration of
makeshift stands that in some ways resemble a swap meet. This should not be surprising
considering the fact that a pow wow is traditionally a gathering place for trade. License
plates on cars hail from all parts of the country: Arizona, Oklahoma, Wisconsin, Kansas,
and others. It is apparent from the various bumper stickers displaying slogans of Native
pride that we are among dignified people. My favorite of all the slogans reads, “Sure you
can trust the government, just ask an Indian.” The Pow Wow is about to open, so we
decide to head towards the entrance.
Upon entering the Indio Pow Wow, we are handed a coupon inviting us to join the
casino’s “Player’s Club.” The coupon guarantees that we will make back at least the
amount of the price of admission to the Pow Wow by taking a free pull at their
designated slot machine. This is a clear example of how the past, present, and future of
California’s Indian population is directly connected to and affected by their gaming
enterprises. Even as we symbolically take a step into the past, we are reminded of how
casino funds make the present and future possible.
viii
We are some of the first to arrive for the day’s festivities, and thus, we decide to
walk around the various stands selling a variety of Native American crafts and products.
Immediately, my eye is caught by a young Apache man selling hats with the names of
different Indian Nations: Comanche, Navajo, Arapahoe, and many others. Attempting to
connect with my native heritage, I ask, “Do you have anything Pawnee?” Sure enough,
there is a hat that I instantly purchase, neglecting to try it out for size. As we walk away,
my girlfriend chuckles. I am sure that a 225 pound white guy who looks like he has
never seen a day of sunlight, wearing a hat that is a size too small for his gargantuan head
with the word “Pawnee” written across it is very amusing. Even I laugh at myself,
however, I truly begin to feel a connection to the people about whom I desire to write.
The Pow Wow is truly a magnificent experience. People from across the country
have gathered to honor their ancestral traditions while praying for the well being of their
loved ones. Many of these loved ones have just begun to fight in the invasion of Iraq.
The master of ceremonies proclaims: “Those who once fought against the flag, now fight
for the flag that gives us our freedom. They are our warriors!” This statement evidences
the fact that Native Americans are an integral part of our society. Native dancers range in
age from senior citizens to toddlers, and they dance and sing with all of their soul and
strength. It is the little ones, the children, that touch my heart. They are the real future of
Native America. They along with their parents, grandparents, and future generations may
reap the benefits of better education, housing, and health care that Indian gaming makes
possible.
The Santa Ynez Chumash Nation of California’s use of casino revenues exhibits
this success. Over one-hundred Santa Ynez Chumash tribal students are currently
ix
enrolled in colleges, universities and trade schools throughout the United States. Tribal
Chairman Vincent Armenta stated “Today, thanks to the revenue from our Chumash
Casino Resort, we established a generous scholarship fund that has helped our tribal
children take educational paths that were not previously available to many of our tribal
members.”1
It is now 2011; at the time of originally writing this introduction in 2003 I felt that
the setbacks of a mostly economic sense would easily be overcome and that I would soon
finish my degree. Little did I realize the challenges that I would face over the next eight
years. Among those challenges was the loss of several important people in my life;
people that left this world before their time. They include my father and my mother-inlaw who both lost battles to cancer. They also include two of my mentors and original
advisors, Dr. Willard Rollings and Dr. Hal Rothman. With the stresses of life and
working in an industry that attempts to prevent people from losing their jobs during hard
economic times, there have been many instances where I felt that this portion of my life
would never be completed. However, through the inspiration of my wife Nicole, my sons
Nicholas and Samuel, my mother Debra, and my Aunt Pat I have persevered. Also with
the assistance and extreme patience of the kind and understanding professors at UNLV
including Dr. Maria Raquel Casas and Dr. Sondra Cosgrove, I have finally come to the
point of completion. God has given me the strength to overcome adversity and to refuse
to quit no matter how many times it seemed like a viable option. Therefore, I present the
following.
1
Vincent Armenta, et al, “The Benefits of Indian Gaming,” Tribal Leader Roundtable, 1 April,
2011, http://www.santaynezchumash.org/links/2010_articles/April%202010%20newsclips/Apr10_TLR.pdf
(accessed April 6, 2011).
x
INTRODUCTION
As stated in the preface to this work, the writing of this thesis has been an
adventure that has lasted more than a decade. I recall reading David Unruh’s The Plains
Across when I was in Dr. Willard Rolling’s class in 1999 and thinking to myself, how
could anyone take ten years of their life to write a single book? Well, I’ve managed to
take longer than that.
I sit here today writing the introduction to this work one month away from
graduating and nearly thirteen years after beginning my quest for a Master of Arts in
History from the University of Nevada Las Vegas. It is also following the successful
defense of my thesis in which my committee members suggested some revisions and
additional clarifying information including this introduction. I am thankful to Dr. Maria
Raquel Casas, Dr. David Tanenhaus, Dr. William Bauer, and Dr. John Tumen for their
suggestions and guidance. Some questions included: What does this work contribute to
the field you are studying? For that case, what field does it fall into? Is it Indian,
gambling, legal or political history? What is the underlying argument and purpose for
writing this paper?
I had to really stop and think about these questions. Both gambling and Indian
history have always intrigued me, but for different reasons. When I was six years old,
my father took me on a cross-country trip to Wisconsin. My parents were divorced, and I
didn’t quite understand it at the time, but he was permanently moving across country.
During the trip, we stopped in Las Vegas. He allowed me to play a slot machine in which
I won sixty cents. I thought it was the greatest thing in the world. Ever since, I have been
xi
interested in gambling, not just for the action aspect, but for the atmosphere of casinos,
the history, the different games, and the impact that casinos have on communities. A few
years later, my mother and aunt took me again on a cross country trip, this time from
California to Florida to Washington, D.C. and back. We stopped at every historical
marker that we could find. From that point on, I was a history junky.
Following high school, I attended Pepperdine University. It was during this time
that I began to research my own family history and discovered that I had Pawnee
ancestry. That opened my intrigue into Native American history. For my senior thesis, I
wrote a brief history of the Indian Claims Commission Act of 1946. I was overwhelmed
in reading the injustices that Indian Nations suffered not only prior to the ICC, but in the
actual administration of the act. At this point I decided to focus on Native American
history as a field.
When first coming to Las Vegas, my goal was to become a teacher. It was in Dr.
Willard Rollings’ seminar class that I had to think of a topic for my thesis. I was in Las
Vegas, and was studying about Indian history. It was kind of like a Reese’s peanut butter
cup, the perfect mix of chocolate and peanut butter; Why not write about Indians and
casinos? But what to write about? At the time of writing, there was a scarcity of
literature on Indian gaming. In fact the two works that stand out, W. Dale Mason’s
Indian Gaming: Tribal Sovereignty and American Politics and Indian Gaming: Who
Wins? edited by Angela Mullis and David Kamper were not published until 2000
following my initial research.
What really drove me into writing this paper is what I explained in the preface.
Living in California and seeing a few small Indian casinos that were either in tents such
xii
as Pechanga, or connected to bowling alleys like Fantasy Springs, I wanted to understand
why these casinos were so different. I asked myself several questions: Why did players
have to pay a commission to play games? Why were casinos located in remote areas?
How was all of this possible? What made it legal? Was California unique?
To answer the questions we first discussed, this work spans various fields. It is
Native American history, legal history, gambling history, California history, and socieconomic history combined. However, as you will read, the overall focus is on the legal
aspects of Indian gaming specific to California. One cannot understand those aspects
without looking to the broader field of Indian gaming. Therefore this paper begins with a
chapter regarding the history of tribal-governmental relationships. Historians of Native
America familiar with Francis Paul Prucha’s The Great Father will recognize most of this
information. The understanding of the legal precedent established in the history of tribalgovernmental relationships is central to understanding the development of Indian gaming
law.
Indian gaming law did not simply develop from the opening of the first tribal
casino. The second chapter of this work focuses on cases that helped to establish the
framework for Indian gaming law primarily focusing on taxation cases and the initial
attempt of local governments to close down tribal bingo halls and card rooms. Chapter
three is devoted to the Indian Gaming Regulatory Act and the Cabazon decision in which
California Indian Nations led the way in challenging state and local interference into
tribal sovereignty. Chapter four examines court cases both within and outside of
California that challenged both the interpretation of the Cabazon decision and the Indian
Gaming Regulatory Act.
xiii
California has been at the center of the Indian gaming debate for several decades.
The first attempt to open and Indian casino was in California. Major court cases have
involved California Indian Nations. Chapter Five is dedicated to the development of
Indian gaming in California including the transition from small operations to the use of
the initiative process in order to force the state to negotiate tribal-state compacts
culminating in the passage of Proposition 1A in 2000 which is the basis for California’s
current Indian casinos. The final chapter deals with legal challenges and changes to
tribal-state compacts during the Schwarzenegger administration.
The underlying purpose of this paper is to give a narrative legal history of the
development of Indian gaming specific to California. In reading actual case law and
working backwards, the research for this work was predominantly done through the use
of primary sources using the opinions of the justices involved in the cases as well as the
governmental acts, propositions and tribal-state compacts specific to this study. One area
that I failed to utilize was law journals. At the time of writing, I was more interested in
the actual primary documents from the cases themselves rather than interpretation of
these cases; however, in hindsight they may have been a helpful resource.
This work fits into a newly developing and growing field of Indian gaming
history. Most of the writing and research for this paper was completed in 2004. As
mentioned, at the time, the two major works that I found useful covering Indian gaming
were W. Dale Mason’s Indian Gaming: Tribal Sovereignty and American Politics and
Indian Gaming: Who Wins? edited by Angela Mullis and David Kamper. Both works
offer excellent information on the development of Indian gaming. Mason’s monograph
however, is focused primarily on New Mexico and Oklahoma with only brief mention of
xiv
California. Indian Gaming Who Wins? is an excellent source for researching California
Indian gaming, however it is a collection of essays rather than a monograph. Further it is
a bit dated as, at the time of publishing, several issues such as the passage of Proposition
1A had yet to be resolved.
Since 2004, new works have been and continue to be published as the field of
Indian gaming continues to expand. The University of North Dakota has been
instrumental in the growth of this field. Steven Andrew Light and Kathryn Rand
directors of the Institute for the Study of Tribal Gaming Law and Policy at the University
of North Dakota have written several works on this topic. Indian Gaming and Tribal
Sovereignty: The Casino Compromise (2005) not only devotes more time to California,
but also looks at the socio-economic aspects of Indian gaming. The authors point out that
there are a lot of misconceptions about the impacts that casinos have on the community
and show that many individuals who criticize Indian gaming are often misguided or
uninformed. This work is also important as it examines the benefits that Indian Nations
have received as a direct result of casino revenue. Rand and Light have also published
two works that I personally have not read, but that would undoubtedly have been useful
in writing this paper. Those works are a collection of the majority of legal acts and cases
that have impacted Indian gaming entitled Indian Gaming Law and Policy (2006) and
Indian Gaming Law: Cases and Materials (2008). Having these works in 2000-2004
could have saved a lot of time, but it is good to see that this field is growing. Finally, the
University of Nevada press has just published the work of Kenneth N. Hansen entitled
The New Politics of Indian Gaming: The Rise of Reservation Interest Groups (2011). I
xv
look forward to reading this book; I know first-hand from my current line of work that
without money, you can’t be a player in the political game.
I hope that the readers of my work find an interesting story of how Indian gaming
has legally developed in California. The story however, has not ended. California
continues to evolve and I am confident that my work will be expanded upon in the future.
Again I thank my committee members especially Dr. Casas, the University of Nevada
Las Vegas, and most importantly my family. It has been a long journey and I hope that
the readers of this work find my efforts helpful and enjoyable.
.
xvi
CHAPTER 1
A HISTORY OF TRIBAL-GOVERNMENTAL RELATIONSHIPS
Unlike the wildflower that seemingly sprouts overnight and then quickly withers
and dies, the growth of Indian gaming is more akin to the mighty oak with a slow
progression as it sinks its roots into the loose American soil. The roots of Indian gaming
then do not trace to the first poker game dealt or slot machine played this century on
native lands, but goes much farther back to the relationship forged between the federal
government and Indian nations at the very birth of the United States. Consequently,
understanding the evolution of this dynamic, complex, and often precarious relationship
is key to comprehending the development of Indian gaming. Therefore, an initial review
of U.S.-Indian relations is essential, as the history of these interactions provides the
groundwork for the contemporary issues surrounding Indian gaming.
Continuing the British pattern of Indian-government relations, the federal
government established a prominent position in Indian matters from the very inception of
the United States and, as time passed, its role as paternal guardian greatly increased.1
The Articles of Confederation, precursor to the Constitution, inaugurated the principle
that the federal government, and not the states, maintained authority over official
government-tribal interaction:
The United States in Congress assembled shall also have the sole and exclusive
right and power of… regulating trade and managing all affairs with the Indians,
not members of any of the states, provided that the legislative right of any state
within its own limits be not infringed or violated.2
1
Francis Paul Prucha, The Great Father: The United States Government and the American Indians
(Lincoln: University of Nebraska Press, 1984), x.
2
Ibid., 14.
1
In 1787, four years after gaining independence from England, the Northwest Ordinance
declared:
The utmost good faith shall always be observed towards the Indians, their lands
and property shall never be taken from them without their consent; and in their
property, rights and liberty, these shall never be invaded or disturbed unless in
just and lawful wars authorised by congress; but laws founded in justice and
humanity shall from time to time be made, for preventing wrongs done to them,
and for preserving peace and friendship with them.3
The idea that Congress held jurisdiction in Indian affairs became solidified this same year
in Philadelphia. The Commerce Clause of the Constitution included the term “and with
the Indian tribes,” thus establishing the plenary power of the U.S. government over
Indian Nations.4 Although benign in tone, the founders established the precedent for
government intervention in tribal affairs on a federal rather than state level, regardless of
whether or not tribal leaders desired such action.
Treaties and commerce, intertwined hand-in-hand, entrenched the idea that the
federal government, rather than state or local governments, was to maintain official
interaction between whites and Indians. This does not negate the fact that daily
interactions between neighboring communities existed, but on a bureaucratic level, the
federal government was supreme. The 1789 Fort Harmar treaties with the Iroquois
Confederacy established the practice that the Senate must approve all treaties before they
took effect.5 Adopting treaties as a legal instrument bestowed a classification of
autonomy upon tribes; however, it was not a grant of full sovereignty. The federal
3
Prucha, The Great Father, 18.
4
Ibid., 19.
5
Ibid., 19-22.
2
treaties prohibited tribal governments from directly dealing with foreign nations, states,
or individuals.6 Further, the United States declared its right to “pre-emption,” the idea
that if and when a tribal government ever decided to sell its land, only the federal
government could purchase it. In the eyes of most government officials, the question was
not “if” the tribes would sell, but “when.” In their view, the Indians were simply
occupying the land for the time being; they did not possess ultimate ownership over their
territories. Land was not the only property right within the realm of federal supervision.
Congress also declared its sole authority to regulate all forms of commerce between
whites and Indians as is evident in the many trade and intercourse laws passed during the
late eighteenth and early nineteenth centuries.
The trade and intercourse laws enlarged federal jurisdiction over a vast array of
white-Indian interaction. The first law, passed July 22, 1790, made all purchase of Indian
lands void unless performed by public treaty between the respected tribal governments
and the United States. It also provided for punishment of crimes committed by whites
against Indians, particularly murder.7 Congress first designated an “Indian Territory” in
the May 19th, 1796, Intercourse Law. A boundary line was drawn to protect Creek and
Cherokee lands from white incursions in Tennessee and Georgia. And in 1796 Congress
also instituted the death penalty for any white that murdered an Indian while in Indian
territory. If an Indian left his land and murdered a white, retribution against the accused
was expected to issue from the tribe. In 1817, Congress modified the previous law to
include punishment of Indians who committed crimes against whites within Indian
6
Prucha, The Great Father, 21.
7
Ibid., 31-32.
3
territory. In the case of murder, the federal government forced tribal governments to
surrender the accused with the threat of military interaction and abduction of hostages.
Yet, if an Anglo-American murdered an Indian, the government paid the family of the
victim in goods typically equal to a sum between $100 and $200, thus putting a price on
the value of an Indian’s life.8 As the laws regulating white-Indian interaction evolved,
the Supreme Court soon found itself interpreting those laws.
The Supreme Court became very active in the arena of Indian affairs during the
tenure of Chief Justice John Marshall. During the period of 1823-1832, Marshall
rendered decisions in three landmark cases collectively referred to as the “Marshall
Trilogy.”9 These rulings set precedent for future litigation concerning relations between
federal and tribal governments. In the 1823 decision of Johnson & Graham’s Lessees v.
McIntosh, Chief Justice Marshall declared that Indian claims to land, while not entirely
void, were nonetheless secondary to federal claims.10 This case arose from a dispute
between plaintiff Joshua Johnson who purchased land directly from the Illinois and
Piankeshaw tribes in 1773 and 1775, and defendant William McIntosh who bought parts
of this same land from the United States in 1818.11 In ruling, Marshall relied upon the
“doctrine of discovery” which, translated in simple terms, is equivalent to the phrase “to
the victor goes the spoils.” As a result of the American “discovery” of “new” lands, the
conqueror was intrinsically granted a greater claim to land in dispute than that of the
8
Prucha, The Great Father, 31-34.
9
W. Dale Mason, Indian Gaming: Tribal Sovereignty and American Politics (Norman: University
of Oklahoma Press, 2000), 14-42.
10
Johnson & Graham’s Lesees v. McIntosh, 21 U.S. 543 (1823).
11
David E Wilkins and K Tsianina Lomawaima, Uneven Ground: American Indian Sovereignty
and Federal Indian Law (Norman: University of Oklahoma Press, 2001), 53-63.
4
conquered. In the historically influential work Uneven Ground, American Indian
Sovereignty and Federal Law, David E. Wilkins and K. Tsianina Lomawaima assert that
the doctrine of discovery “reduces Indian tribes to mere tenants, whose legal claims to
their aboriginal homelands are secondary to the claims of the discoverers.”12 Although
Marshall stopped short of completely abolishing any rights to their native land, his
opinion was clearly a setback for Native rights.
The subsequent Marshall Trilogy decisions dealt both directly and indirectly with
the Cherokee Nation. One of the “Five Civilized Tribes,” the Cherokee adopted many
aspects of Anglo-American culture. The Cherokee were not nomadic, but had
acculturated by adopting the sedentary agricultural lifestyle that Anglo-society so
adamantly proclaimed as the bedrock of civilization. A large number of tribal members
were not only literate in their own language, but could also speak and understand English.
The publication of a tribal newspaper, “The Cherokee Phoenix,” written in both Cherokee
and English is testament to this fact.13 On July 16, 1827, tribal leaders took the
monumental step of adopting a written constitution formulated on the example of the
United States Constitution.14 Yet, these efforts were not enough to prevent white
encroachment onto Cherokee lands. Many in government including the “Great Father,”
President Andrew Jackson, believed it necessary to move the tribe west beyond the areas
that white farmers desired. Jackson did not view Indian tribes as sovereign, and found it
absurd to deal with tribal leaders as if they were independent of the laws of the United
12
Wilkins and Lomawaima, Uneven Ground, 53-63
13
Prucha, The Great Father, 66.
14
Ibid., 67.
5
States. Although Jackson publicly declared that, “This emigration should be voluntary,
for it would be as cruel as unjust to compel the aborigines to abandon the graves of their
fathers and seek a home in a distant land,”15 it is clear that he planned their removal at
any cost. Congressional allies drafted a Removal Bill and, despite the protests of the
Cherokee and some white sympathizers, the bill passed. The final vote was 28-19 in the
Senate and 102-97 in the House of Representatives.16 This meant nothing to the
Cherokee who were not simply going to give up and leave their traditional homelands.
They decided to appeal their case to the Supreme Court.
The second decision in the Marshall Trilogy addressed the status of Indian tribes
among legal entities. The Cherokee Nation of Georgia attempted to prevent the state of
Georgia from enforcing its laws on tribal territory. The tribe argued that they were
sovereign under Article 3, section 2, clause 2 of the United States Constitution.17 This
portion of the Constitution gives the Supreme Court jurisdiction over cases in which a
“state” is a party. The Cherokee contended that they were protected under this clause as
a “foreign nation, not owing allegiance to the United States, nor to any State of the
Union.”18 Chief Justice Marshall, however, did not support this notion in his 1831
opinion of Cherokee Nation v. Georgia. Rather than independent nations, Marshall
labeled Indian Tribes as “domestic dependent nations.” Marshall’s view reflected the
contemporary opinion that Indians were occupants rather than owners of land. The
President, known as the “Great Father,” granted title of the land for Indian use. However,
15
Prucha, The Great Father, 69.
16
Ibid.,75.
17
Mason, Indian Gaming, 18.
18
Cherokee Nation v. Georgia, 30 U.S. 1 (1831).
6
this was not “ownership” in the Anglo sense of the word. In Anglo-American opinion,
Indian peoples did not and could not comprehend the concept of private ownership. It
was the divine right and duty of the Anglo-populace to take the land from Indian tribes
and cultivate it into a reflection of European ideals. Marshall held strongly to this
ideology, believing that Indian title to land would inevitably cease, enabling the federal
government to obtain possession. While demonstrating sympathy for Native Americans
that exceeded that of the majority of his fellow citizens, Marshall pictured Indians not as
social equals, but as children stating, “Their relation to the United States resembles that
of a ward to his guardian.”19 Ultimately, Marshall concluded that the Cherokee were not
protected under Article 3 of the Constitution, but he did not address the question of
whether Georgia could enforce state laws upon Indian nations within its territory. That
question would be answered in 1832.
Considering Chief Justice Marshall’s rulings in the previous two cases, the 1832
decision of Worcester v. Georgia is somewhat of a surprise. This case involved Samuel
Worcester, one of two missionaries arrested for violating Georgia state law. State law
mandated non-Indians to obtain a license and sign an oath of loyalty prior to entering
Indian territory. Worcester neglected to do this when visiting the Cherokee, so Georgia
accused Worcester and his partner Elizur Butler of encouraging the Cherokee to resist
removal efforts. The state deemed Worcester and Butler as threats and subsequently
attempted to remove the missionaries. When they would not voluntarily leave, both were
arrested, tried, and sentenced to four years of “hard labor.” 20 The convicted men
19
Cherokee, 30 U.S.; Mason, Indian Gaming, 18-19.
20
Mason, Indian Gaming, 18.; Prucha, The Great Father, 75-77.
7
appealed to the Supreme Court, giving John Marshall yet another chance to address the
issue of jurisdiction over Indian lands.
In contrast to Johnson v. McIntosh and Cherokee Nation v. Georgia, Worcester
v. Georgia contained favorable language for Native Americans. Although the Cherokee
were still a “weaker power” in Marshall’s view, the nation did not “surrender its
independence – its right to self-government, by associating with a stronger, and taking its
protection.”21 Contrary to previous opinions, Marshall stated that the laws of Georgia did
not extend to Indian territories, declaring the Cherokee Nation to be:
A distinct community, occupying its own territory, with boundaries accurately
described, in which the laws of Georgia can have no force, and which the citizens of
Georgia have no right to enter, but with the assent of the Cherokees themselves, or in
conformity with treaties, and with the acts of Congress.22
The Chief Justice further looked to the Commerce clause of the United States
Constitution Article 1, Section 8, clause 3, which expressly gave Congress the power “to
regulate Commerce with foreign Nations, among the several States, and with the Indian
tribes.”23 Marshall used this foundation in declaring, “The treaties and laws of the United
States contemplate the Indian Territory as completely separated from that of the States;
and provide that all intercourse with them shall be carried on exclusively by the
government of the Union.”24 The states lacked the authority to interfere or intervene in
Indian affairs unless expressly authorized to do so by an act of Congress. In accordance
with this ruling, only the federal government could directly deal with Indian nations.
21
Worcester v. Georgia, 31 U.S. 515 (1832).; Prucha, The Great Father, 77.
22
Id.
23
U. S. Constitution, art. 1, sec. 8.
24
Worcester, 31 U.S.; Mason, Indian Gaming, 19.
8
The language of Marshall’s decision was clearly a setback for the state of
Georgia. However, Marshall’s ruling failed to prevent the removal of the Cherokee and
the other “civilized” tribes to the west. The use of a technicality enabled the state to
bypass the court’s decision. Georgia simply ignored the court’s mandate to reverse the
convictions of Worcester and Butler and to release them. If the state formally refused the
court’s instructions, then the court could order federal marshals to Georgia in order to
free the men. By not acting, the state prevented such action. Jackson stated, “The
decision of the Supreme Court has fell still born, and they cannot coerce Georgia to yield
to its mandate.”25 The court adjourned before resolving the issue, and Jackson quickly
seized the opportunity to act. The president asked Georgia’s governor to pardon the
missionaries and he complied. The American Board of Commissioners for Foreign
Missions persuaded their missionaries to accept the offer of pardon, thus bringing a
settlement to the original cause of action for the case.
Jackson ignored the remaining aspects of Marshall’s decision and proceeded with
his plan to remove the Indians to the west. He authorized removal treaties drawn up for
the Choctaw, Creek, Chickasaw, and most famously the Cherokee. The Seminole of
Florida attempted to prevent emigration, and fought the U.S. in two wars. Some
Seminoles managed to stay on their lands, but inevitably the government forced many
from their Native homes. The federal government forced more than 60,000 people from
the “Five Civilized Tribes” west. The removal caused great discontent and factionalism
between groups that advocated leaving traditional lands and those who adamantly
opposed leaving. The journey itself was disastrous for many, most notably the scores of
25
Prucha, The Great Father, 77.
9
Cherokee that died on the “Trail of Tears.”26 Jackson’s policy of removal not only
affected the tribes of the east, but set the precedent for removing Indians from any lands
that the federal government deemed desirable. Jackson and his supporters believed that
migration west was a permanent solution to the “Indian problem,” however it simply
delayed the issue. As the American nation continued to grow and expand west, conflicts
ensued between whites and Indians, forcing the federal government to act.
While Chief Justice John Marshall and the judicial branch of government
established the foundational groundwork for Native American litigation, the legislative
branch created a special department to deal specifically with Indian issues. On March 11,
1824, without any type of Congressional authorization, Secretary of War John C.
Calhoun initialized the Bureau of Indian Affairs, also known as the Office of Indian
Affairs. He appointed Thomas L. McKenney, former Superintendent of Indian Trade, to
head the bureau.27 A philanthropic man, McKenney appears to have been generally
concerned with the well being of Native Americans. McKenney gained valuable
experience during his tenure with the Office of Indian Trade during which time he was
the strongest proponent of the “factory system.” George Washington initiated the factory
system in which government trading houses provided Indians essential items such as
rifles for hunting, clothing, cooking utensils, and agricultural equipment on a fair trading
basis. The idea was not to create a profitable business, but to provide the Natives with a
means for becoming “civilized.” McKenney expanded upon this idea by promoting
education and instruction in becoming an ideal farmer. He advocated opening a national
26
Prucha, The Great Father, 87.
27
Ibid., 59.
10
school system for Indians paid for with funds accrued by expanding the factory system.
This did not sit well with traders (such as John Jacob Astor, owner of the American Fur
Company) who were in the business of making profits. Astor’s political connection in
Washington, Senator Thomas Hart Benton, accused McKenney of mismanagement of
goods and convinced Congress to instead abolish the factory system in 1822.28 This
defeat did not prevent McKenney from continuing his efforts of civilizing the Indians,
however, in his new position as head of the Bureau of Indian Affairs.
During McKenney’s leadership, from 1824-1830, Indian affairs had been treated
as a special category of the War Department. Now with much of the focus being placed
upon managing appropriations for annuities and administering the civilization of Indians,
it became apparent that creating a separate department for Indian matters that handled
more than war was necessary. Following McKenney’s departure, Congress officially
created the Indian Department in 1832. Under the supervision of the War Department,
this subdivision was at first a loose conglomeration of all individuals assigned to Indian
matters throughout the government. In 1834, although still under the canopy of the War
Department, the Bureau of Indian Affairs officially became a separate entity within the
federal government charged with the duty of managing Indian concerns. The Bureau of
Indian Affairs in effect acted as a conduit of the paternalistic ideals promulgated from the
executive, legislative, and judicial branches from the inception of the nation.29 In the
Bureau’s view, Native Americans simply did not know what was best for themselves.
28
Prucha, The Great Father, 35-41.
29
Ibid., The Great Father, 56-60.
11
Therefore, it was up to the bureau to enlighten them with the proper way to become
civilized.
At the turn of the nineteenth century, the Second Great Awakening energized a
new zeal of Protestant Christianity throughout the country. This missionary spirit lasted
throughout the century and was reflected in the leadership and goals of the Bureau of
Indian Affairs. Adopting the principles of evangelicalism, the Bureau began to endow
the Native people with a biblical desire to tame the land. The views of the Bureau merely
reflected the ideals of contemporary society: agriculture and private property were the
key elements to civilization. The desire to nomadically hunt and communally share had
to be replaced with the aspiration to farm on an individual and privately owned basis.
The Bible commanded the people to be “tillers of the soil,” and in order to meet that
command, the Bureau found it necessary to provide the means for Indians to become
horticulturalists. Therefore, the Bureau continued the policy of giving presents and
providing annuities practiced during the factory system.
Annuities were grants of money or goods given to tribes as a result of treaties
between tribal governments and the U.S. As the name implies, they were usually
distributed on an annual or semiannual basis. Extra money was often granted in order to
pay off any debts that the tribe might owe to local traders. The federal government
viewed traders as a vice that weakened their efforts among Native groups by bringing in
alcohol or causing great indebtedness because of unfair trade practices. The Bureau
intended that the supply of goods was to create peace and to benefit tribal members by
providing agriculture supplies, guaranteeing a fair price for trade, and preventing the
negative effects of vices such as alcohol which was illegal to trade; however, the policy
12
often had the deleterious effect of making groups dependent upon the federal
government. If annuities did not arrive on time, or were simply neglected, disastrous
effects such as starvation could occur.30
As the century progressed, the idea of persuading Indians to adapt to the ways of
white society transformed into the belief that tribes must be forced to conform. Treaties
were no longer agreements between two separate powers, but instead a means by which
the federal government could achieve its objectives under a legal guise. This shift is
reflected in a comparison of the language of T. Hartley Crawford commissioner of Indian
Affairs from 1838 to 1845, and Luke Lea, commissioner from 1850 to 1853. Crawford
viewed Indians as equals that simply needed time to adapt:
It is proved, I think, conclusively, that it is in no respect inferior to our own race,
except in being less fortunately circumstanced. As great an aptitude for learning
the letters, the pursuits, and arts of civilized life, is evident; if their progress is
slow, so has it been with us and with masses of men in all nations and ages. 31
Contrarily, Lea believed that Native Americans were simply full of “haughty pride” and
should be forced to “resort to agricultural labor or starve.”32 Thus, the formation of a
reservation system became paramount to the Bureau. By segregating the Indians from
the white populace, the Bureau believed that it could force civilization upon tribal
members while removing an impediment to national progress. The principle of civilizing
the Indians and making them a reflection of general society no longer was a suggestion,
but a command.
30
Prucha, The Great Father, 99-107.
31
Ibid., 100.
32
Ibid., 112-113.
13
As the American populace continued its westward expansion, the “Indian
Problem” became increasingly troublesome. In 1849, the Bureau of Indian Affairs
moved from the War Department to the newly organized Department of the Interior.
Despite the change, the Bureau remained steadfastly focused upon removing any
obstacles that Native societies posed in preventing the advancement of western
civilization. The method of choice in achieving this goal was the forced placement of
tribal members upon reservations secluded from the white populace. In this manner,
tribes would not only be out of the path of expansion, but their acculturation and
refinement to the ways of white civilization could be expedited without interference. The
Civil War briefly interrupted the efforts of the Bureau as some southern tribes, including
the “Five Civilized Tribes,” signed treaties with the Confederacy. Many groups appear to
have been treated in a more favorable manner by the Confederate government than with
the Union. However, with the end of the war, any gains that tribal leaders made with the
Confederacy became moot. With the war behind them, the Bureau resumed its efforts of
placing Indian people on reservations with the full backing of the federal government.33
Following the Civil War Christians resumed their role as civilizing agents.
Corruption among agents led Congress and the president to appoint Christian men that
they assumed were morally superior to oversee Indian affairs. On April 10, 1869,
Congress established the Board of Indian Commissioners, a group of Christian leaders
that equally shared the responsibility for disbursement of appropriations to Indians with
the Secretary of the Interior.34 The Board wanted to shift away from the granting of
33
Prucha, The Great Father, 136-151.
34
Ibid., The Great Father, 158.
14
monetary annuities, which in their opinion led to idleness, and to do away with the treaty
making system. Congress also deemed Indians to be defeated and therefore not worthy
of treaties. Indian agencies were split amongst several different religious organizations
which eventually led to interdenominational rivalry. Often, groups appeared to be more
interested in simply maintaining their Christian image in comparison with other church
affiliations rather than actually focusing on helping the Native peoples under their charge.
Christian men did no better at running Indian affairs than non-Christians as they were
untrained in running large bureaucracies.
Despite these problems, the influence of religious doctrine upon the federal
government remained profound. The beliefs preached by theological groups became
policy in 1871, as the Indian Appropriation Act ended the era of treaty making.35 Anglosociety no longer viewed Indian tribes as semi-independent entities, but solely as wards
of the government that eventually were to be assimilated, individualized, and made into
citizens. Assimilation could only be achieved by giving up the Indian way of life and
moving to a reservation. On the reservation, one would be free to learn the superiority of
agriculture, individual ownership of property, and Christianity away from the corrupting
influence of white society. If this was not done voluntarily, then military force would
compel the Indians to live on reservations. Leaders in the federal government believed
that they were looking out for the best interest of the Indians. Resistance, in their view,
was simply a reflection of the fact that Indian people did not know what was truly
beneficial for themselves and for the future of the nation as a whole. Through
35
Prucha, The Great Father, 165.
15
concentrating Indians on reservations, the Government could achieve its true goal of
opening the remaining Indian territory to white settlement.
Possessed of a standing army for the first time following the Civil War the federal
government set out to defeat its native population once and for all. By the last two
decades of the nineteenth century, following several “Indian Wars,” the majority of
Indians within the country were placed upon reservations. Using the standards set in
earlier decades, the government was close to achieving its goals. The obstacles to
westward expansion had been removed, and the efforts to civilize Indians could proceed.
However, a shift in ideology occurred among the religious leadership that directly
affected government policy. Reformers who had worked with freed slaves introduced
this new ideology; they wanted to treat Indians the same as the emancipated slaves and to
integrate them into white society. Reservations, the saving grace of Indian life, were now
viewed as an obstacle to the ultimate goal of citizenship. Indians did not fall under the
protections and guidelines of the law as did the rest of white society. In the eyes of
many, this was unfair to the Indians themselves, “we owe it to them, and to ourselves, to
teach them the majesty of civilized law, and to extend to them its protection against the
lawless among themselves.”36
The Indian Rights Association, a Christian organization founded in Philadelphia
in 1882, believed that Indians were treated unfairly because they were not under the law.
The group was concerned that unscrupulous individuals might find an ignorant Indian
who did not know that he was being taken advantage of and swindle him. Additionally,
in their view, reservations promoted segregation rather than assimilation. Indians were
36
Prucha, The Great Father, 195.
16
supposed to learn the benefits of agriculture and private ownership of land; however, the
disbursement of annuities and rations led many Christian reformers to believe that
Indians were simply being taught laziness and dependency upon the government. Most
in American society pointed to the great amount of “excess” land that they believed
reservation Indians were not utilizing. The public began to call for the opening of this
land to white settlement, and for the allotment of land to Indians in a specified acreage
amount. It was believed that an individual only needed a certain amount of land to
sustain himself and his family. By selling the land that was not in use, it could be opened
to cultivation by white farmers. They, in turn, could show by example the benefits of
agriculture and teach the Indians how to be self-sufficient. Any proceeds from the sale of
land could be used to promote civilization and education within the tribe.
The idea of allotting land to individual Indians became official policy in the 1887
Dawes Act. Originally proposed by Texas Senator Richard Coke, the act took its name
from Massachusetts Senator and chairman of the Committee on Indian Affairs, Henry L.
Dawes.37 The legislation enabled the President to designate one-hundred and sixty acre
lots to each head of family within a tribe. Smaller acreage amounts could be granted to
single individuals and minors. Tribal members were allowed to choose their allotments
pending approval by the Secretary of the Interior. If an individual did not select suitable
land for himself within four years, then the President or Indian agent would make the
selection. A patent was given to each land-owner stating that the government would hold
title for a twenty-five year trust period. At the end of this time, the government
relinquished title and granted the land to the tribal member in fee simple. All excess land
37
Prucha, The Great Father, 200-225.
17
became open to negotiation for sale. The proceeds of such sale were to be placed into a
Treasury fund solely for education and civilization purposes. Most importantly, once an
Indian received his allotment, he became a U.S. citizen.
In theory, the government envisioned allotment as a means of turning Indians into
mirror-images of their white neighbors. The practical application of allotment exhibited
the problems in this theory, however. To begin, the Dawes Act did not universally apply
to all Indian tribes. Within Indian Territory, the “Five Civilized Tribes” (Cherokee,
Choctaw, Chickasaw, Creek, and Seminole), the Osage, Miami, Peoria, and Sac and Fox,
were excluded from the act. In addition, the Seneca of New York, and some
Santee/Dakota in Nebraska were also exempt. Second, allotment did not bring about a
sudden adoption of agriculture as reformers had intended. In many cases, people such as
the elderly or students away at school, were incapable of tending to their land. To resolve
this, Congress allowed the disabled and those who had an “inability” to utilize their
allotment to lease out their land. This, however, was a further hindrance to the attempts
to turn Indians into farmers. Many simply used rented land as a source of income without
attempting to cultivate the soil themselves. The Dawes Act accomplished the reduction
of Native holdings. Territory belonging to Indian tribes was reduced by fifty percent in a
twenty year span declining from 155,632,312 acres in 1881 to 77,865,373 acres in 1900.38
Only 5,409,430 acres were allotted to individuals. The Dawes Act increased
opportunities for prosperity for the majority of Americans at the expense of the tribal
38
Prucha, The Great Father, 227.
18
minorities. Despite the results, the drive to assimilate Native Americans into the
American mainstream continued, all in the name of progress.
A general call to make Native Americans subject to the nation’s laws
accompanied support for allotment. Most in society believed that holding Indians to a
different standard was not only unfair to whites, who were expected to obey the law, but
also an injustice to the Indians themselves who were denied the privilege of living in a
lawful society. The United States Supreme Court exacerbated this belief in the ruling of
Ex Parte Crow Dog, decided December 17, 1883.39 The court tried Crow Dog, a member
of the Brule´ band of the Lakota nation, for murder in the death of Chief Spotted Tail,
also a member of the Brule´. The territorial court of Dakota sentenced Crow Dog to
death with the execution to be carried out on January 14, 1884.40
Walter H. Smith and A.J. Plowman appealed the case to the Supreme Court on
behalf of Crow Dog. In the prayer of their petition, counsel asked the court to grant a
writ of habeas corpus in order to free their client from an alleged illegal imprisonment.
They argued that the United States did not hold jurisdiction over crimes committed by
one Indian against another. The court agreed in a review of section 5339 of the Revised
Statutes which stated, “every person who commits murder … within any fort, arsenal,
dock-yard, magazine, or in any other place or district of country under the exclusive
jurisdiction of the United States … shall suffer death.”41 The court considered the fact
that Title 28 of the Revised Statutes directly dealt with Indians and included punishment
39
Prucha, The Great Father, 229.
40
Ex Parte Crow Dog, 109 U.S. 556, 3 S. Ct. 396, 27 L. Ed. 1030 (1883).
41
Id. at 558.
19
for crimes. However, these punishments focused solely on crimes committed by Indians
against whites or whites against Indians. They did not provide any basis for
reprimanding an Indian who acted against another Indian. In fact, section 2146
specifically stated, “The preceding section shall not be construed to extend to crimes
committed by one Indian against the person or property of another Indian …”42 The court
pointed to this exclusion as a primary basis for deeming the conviction of Crow Dog as
“illegal and void.” Although the territorial court held jurisdiction over Indian versus
white or white versus Indian offenses, it could not prosecute purely Indian matters.
Further, the court expressed the opinion that it was unreasonable to expect tribal members
to be subject to a code of law that was unknown to them:
It tries them not by their peers, nor by the customs of their people, nor the law of
their land, but by superiors of a different race, according to the law of a social
state of which they have an imperfect conception, and which is opposed to the
traditions of their history, to the habits of their lives, to the strongest prejudices of
their savage nature; one which measures the red man’s revenge by the maxims of
the white man’s morality.43
Ultimately, the court determined that to concur with the federal government’s argument
would necessitate a reversal of the long standing policy of leaving purely internal matters
to the jurisdiction of tribal governments. Crow Dog was thus ordered released and spared
execution.
Neither the general public nor political leaders were pleased with the decision of
the court. Only an act of Congress could change the jurisdictional boundaries of federal
law; thus, Congress acted quickly to make Indians subject to certain criminal acts. The
42
Ex Parte Crow Dog, 109 U.S. at 558.
43
Id. at 571.
20
Major Crimes Act of 1885 enumerated seven offenses: murder, manslaughter, rape,
assault with intent to kill, arson, burglary, and larceny.44 The federal government could
punish any Indian that committed one of these offenses against another Indian. Congress
granted the jurisdictional power that the federal government so adamantly desired,
however, it was not long before this authority was questioned. A little more than a year
after Congress passed the Major Crimes Act, the Supreme Court determined its
constitutional validity.
United States v. Kagama came to the Supreme Court on a Certificate of Division
of Opinion between the circuit judge and district judge for the district of California.45
The two judges could not reach the same conclusion in deciding the fate of Kagama, also
known as “Pactah Billy,” or his accomplice Mahawaha, also known as “Ben.” Both were
members of the Hoopa Valley reservation and were charged in the murder of a fellow
tribal member Iyouse or “Ike.” The crime of murder was one of the seven listed in the
Major Crimes Act, thus making the actions of Kagama subject to federal authority. The
Court, however, questioned whether Congress had violated the Constitution and thus
created an invalid law. They first studied the language of the Major Crimes Act which
provided a clear distinction between crimes committed within a territory and those within
a state. If one of the seven major crimes was committed within a territory of the United
States, then the laws of that territory were observed. The proper venue for any judicial
proceedings was the territorial courts. It made no difference whether the crime was
44
18 USC § 1153. The Major Crimes Act has been amended several times since its original
passage. In addition to the original crimes listed, the act currently covers seven additional offenses:
kidnapping, incest, assault with a dangerous weapon, assault resulting in serious bodily injury, assault with
intent to commit rape, robbery, and felonious sexual molestation of a minor.
45
United States v. Kagama, 118 U.S. 375, 6 S. Ct. 1109, 30 L.Ed. 228 (1886).
21
committed on or off of a reservation.46 Conversely, if the crime was committed within
the boundaries of a state, then the federal government maintained control over all
proceedings. In addition, the crime must have been committed within the boundaries of a
reservation for these aspects to apply. As the court observed, this legislation was new in
the fact that these provisions were specifically written for crimes committed by one
Indian against another.
The Court found little assistance from the Constitution itself, and declared that the
document is “almost silent in regard to the relations of the government which was
established by it to the numerous tribes of Indians within its borders.”47 In the minds of
the justices, the Commerce Clause was not intended to be used as a basis for the
formulation of a system of criminal laws. Looking to John Marshall’s opinion in
Cherokee Nation v. Georgia, the Court reiterated the point that Indian tribes were neither
states nor nations containing full sovereignty, but were domestic dependent nations with
a semi-independent status.48 Following this definition, Justice Samuel F. Miller, author of
the court’s opinion, stated that only two types of sovereignties existed within the
geographical boundaries of the United States. These classifications were federal and
state. As Miller declared, “There may be cities, counties, and other organized bodies,
with limited legislative functions, but they are all derived from, or exist in subordination
to one or the other of these.”49 Citing case law in the matter of Murphy v. Ramsey, the
Court determined that the United States drew its power from “the ownership of the
46
Kagama, 118 U.S. at 376-377.
47
Id. at 378.
48
Cherokee, 30 U.S.
49
Kagama, 118 U.S. at 379.
22
country in which the territories are, and the right of exclusive sovereignty which must
exist in the national government, and can be found nowhere else.”50 This statement
restated the position that Indian tribes merely maintained a “possessory right to the soil,”
but the United States held ultimate title to the land.
Following the Indian Appropriation Act of 1871, the relationships between Indian
tribes and the United States were no longer governed by treaties, but dictated solely by
Congressional acts. In Ex Parte Crow Dog, the Court pointed to the lack of
Congressional action regarding the act of murder by one Indian against another as a
justification for the release of Crow Dog. To fill that gap, Congress passed the Major
Crimes Act. Justice Miller agreed with the position that Congress maintained the right to
create and enforce laws that were within the realm of federal authority. The Major
Crimes Act was an extension of this authority, and thus was not a violation of the
Constitution. The only remaining question was whether the defendants Kagama and
Mahawaha fell under federal or state jurisdiction. The crime in this instance was
committed entirely within the physical limitations of a reservation located in an existing
state. These conditions determined that the federal government held the right of
prosecution at the exclusion of the state.
United States v. Kagama not only solidified the position of the federal
government in intervening in Indian affairs, but established an important precedent that
would limit the ability of state governments from interfering in Indian matters. A state
could not pass a law concerning Indian tribes. Only the federal government, through an
50
Murphy v. Ramsey, 114 U.S. 44; S.C. Sup. Ct. Rep. 747 (1885).
23
act of Congress could create laws that affected Indian rights. This premise would stand
until later in the twentieth century.
Early in the twentieth century, new challenges forced the legislature and judiciary
to examine existing policies governing Native Americans. On October 23, 1902,
arguments commenced in the case of Lone Wolf v. Hitchcock.51 Counsel for the plaintiff
Lone Wolf, a Kiowa Indian, contended that allotment of tribal lands and subsequent sale
of “excess” lands of the Kiowa, Comanche, and Apache tribes was a violation of the
1867 Medicine Lodge treaty and therefore an abuse of congressional power. Within the
terms of the treaty, the United States and respective tribal leaders agreed that any cession
of reservation land would be invalid “unless executed and signed by at least three-fourths
of all the adult male Indians occupying the same.”52 Plaintiffs argued that not only were
there not enough signatures to constitute three-fourths of the male population, but that a
large portion of the collected signatures were obtained through coercion or by forgery.
The case was taken under submission and ruled on January 5, 1903.
Justice Edward D. White’s written opinion reinforced the view maintained by the
majority of the American populace that Indian nations were subordinate to the federal
government and through that government to the will of the majority. Regardless of
whether the United States violated the treaty of Medicine Lodge, congressional power
was absolute and unquestionable: “Plenary authority over the tribal relations of the
Indians has been exercised from the beginning, and the power has always been deemed a
51
Lone Wolf v. Hitchcock, 187 U.S. 533, 23 S. Ct. 216 47 L. Ed. 299 (1903).
52
Id. at 554.
24
political one, not subject to be controlled by the judicial department of the government.”53
The court reiterated the sentiment of former Supreme Court opinions that Indians simply
held a right of occupancy to land. Actual title and ultimate ownership of the land
belonged to the United States. Treaty provisions such as the three-fourths rule of
Medicine Lodge could “deprive Congress, in a possible emergency, when the necessity
might be urgent for a partition and disposal of the tribal lands, of all power to act, if the
assent of the Indians could not be obtained.”54 Therefore, Justice White explained that it
was a necessary and inherent congressional right to abrogate treaty requirements. The
court did not expand upon the definition of an “emergency,” but declared that Congress
would only act in the best interests of the nation’s wards: “We must presume that
Congress acted in perfect good faith in the dealings with the Indians of which complaint
is made, and that the legislative branch of government exercised its best judgment in the
premises.”55 It would appear that this logic contradicted the Indian Appropriation Act of
1871 that specified, “but no obligation of any treaty lawfully made and ratified with any
such Indian nation or tribe prior to March 3d, 1871, shall be hereby invalidated or
impaired.”56 Yet, in a somewhat puzzling manner, the court pointed to this very passage
as justification of the authority of Congress to overturn or bypass the Medicine Lodge
treaty. The fact that Indians had been decimated and reduced to more of a nuisance than
a threat empowered the Court to feel that there would be no negative repercussions or
public scrutiny in breaking treaty agreements.
53
Lone Wolf, 187 U.S. at 565.
54
Id. at 564.
55
Id. at 568.
56
Section 2079 of the Revised Statutes.
25
Two years after Lone Wolf, the Supreme Court delivered another blow to tribal
interests; however, unlike former decisions, the ruling of In the Matter of the Application
of Albert Heff, for a Writ of Habeas Corpus was equally detrimental to federal authority.57
The case directly concerned the arrest of Heff, a non-Indian, for the sale of alcohol to an
Indian. Heff contended that his arrest and subsequent conviction under the Congressional
Act of January 30, 1897, was unconstitutional. The act made sale of any kind of liquor to
an Indian that had either received an allotment held in trust by the government or was still
currently a ward of the government, illegal and punishable by imprisonment and
monetary fines.58 Justice David J. Brewer delivered the opinion of the court, which
determined that the matter was beyond federal control.
In ruling that the federal government had overstepped its authority, the Supreme
Court superseded congressional intention in the 1887 Dawes Act. Justice Brewer stated
that, upon accepting allotment, an Indian became a citizen of the United States and the
respective state in which he or she resided regardless of whether or not the allotment was
currently held in trust by the federal government:
In the first place, it is hardly to be supposed that Congress would legislate twentyfive years in advance in respect to the general status of these Indians … So far as
his political status is concerned, the allottee is declared to be a citizen, -- not that
he will be a citizen after twenty-five years have passed and a second patent shall
have been issued.59
Having become a citizen of the state in which he or she resided, an Indian was no longer
subject to federal policing power, but was entirely under the laws of that state.
57
In Re Heff, 197 U.S. 488, 25 S. Ct. 506, 49 L. Ed. 848 (1905).
58
Id. at 490.
59
Id. at 502-503.
26
Jurisdictional authority in this manner either belonged to the state or to the federal
government, it could not be split between both as Justice Brewer declared, “There is in
these police matters no such thing as a divided sovereignty. Jurisdiction is vested entirely
in either the state or the nation, and not divided between the two.”60 Attempts to claim
that liquor sales fell under the Commerce Clause of the constitution or internal revenue
laws were moot. The Supreme Court granted Heff’s petition for a writ of habeas corpus,
and released him.
Beyond the manifest issue of liquor sales to Indians, a brief passage within the
court’s decision held the potential to dramatically transform the tribal-federal relationship
paradigm. The statement read:
Of late years a new policy has found expression in the legislation of Congress, -- a
policy which looks to the breaking up of tribal relations, the establishing of the
separate Indians in individual homes, free from national guardianship and charged
with all the rights and obligations of citizens of the United States. Of the power of
the government to carry out this policy there can be no doubt. It is under no
constitutional obligation to perpetually continue the relationship of guardian and
ward. It may at any time abandon its guardianship and leave the ward to assume
and be subject to all the privileges and burdens of one sui juris. And it is for
Congress to determine when and how that relationship of guardianship shall be
abandoned.61
By this definition, Congress could arbitrarily decide to simply remove its protection over
Indian tribes and cease to provide assistance to tribal members. This surpassed the scope
of Lone Wolf as Congress could not only abrogate treaty stipulations, but could
completely renege on all promises made to Indians. The court in Heff pointed to what
they viewed as a congressional and popular trend of legislation that was leading towards
the goal of terminating the federal trust relationship. In the court’s view, this goal was
60
In Re Heff, 197 U.S. at 506.
61
Id. at 499.
27
achieved once an Indian became a citizen; receipt of allotment denoted citizenship status,
which ended the federal government’s trust responsibility. The door was now open for
Congress to end its role as guardian and provider for Indian nations.
Congress was not ready to end the special relationship with its “wards” and was
equally reluctant to give up jurisdictional authority to the states. In response to Heff,
Congress passed the Burke Act in 1906. The Burke Act amended the 1887 Dawes Act in
a manner that delayed citizenship to Indian allottees and reaffirmed federal control in
Indian matters. The act specifically stated, “That at the expiration of the trust period and
when the lands have been conveyed to the Indians by patent in fee...” Indians would
become citizens and subject to the civil and criminal laws of the state or territory in
which they resided.62 Further, Congress made clear, “That until the issuance of feesimple patents all allottees to whom trust patents shall hereafter be issued shall be subject
to the exclusive jurisdiction of the United States.”63 The Burke Act clearly demonstrated
that the Supreme Court had misinterpreted congressional intention in the Dawes Act in its
Heff ruling. While the idea of eventually ending the guardianship role of the federal
government may have floated around the halls of Congress, the legislature demanded that
the timing of such an event be left in their hands.
A decade after the Burke Act, the Supreme Court acknowledged Congress’
objection to their opinion in Heff and reversed the ruling of the prior court. United States
v. Nice, decided June 15, 1916, proclaimed the principle that, “Citizenship is not
62
Burke Act of 1906, 34 Stat. 183.
63
Id. at 183. The Burke Act of 1906 amended the 1887 Dawes Act, but did not apply to Indians
within Indian Territory (modern day Oklahoma).
28
incompatible with tribal existence or continued guardianship.”64 Similar to the issue in
Heff, United States v. Nice directly addressed congressional authority in regulating liquor
trade to Indians. Justice Willis Van Devanter’s opinion examined many of the same
documents that Justice David J. Brewer had reviewed in 1905. Contrary to the previous
conclusion, Van Devanter found that Congress did not exceed its limits over Indian
matters. Not only did the Commerce Clause support the federal government’s position;
but further, allotment under the Dawes Act did not indicate termination of the
government’s role as guardian to Indian nations. Van Devanter stated, “According to a
familiar rule, legislation affecting the Indians is to be construed in their interest, and a
purpose to make a radical departure is not lightly inferred.”65 The Heff decision was a
complete change in policy and one which was unfavorable to Indian interests, thus
violating this rule. In scrutinizing the language of the Dawes Act, Van Devanter
concluded that the premise that the words “were to be taken with some implied
limitations, and not literally, is obvious.”66 The fact that an Indian received an allotment,
or even gained citizenship did not make him fully subject to state laws. Congress
expressly retained control over matters such as education, civilizing efforts, and liquor
trafficking. State laws could not impede upon federal goals. The question of which laws
a state could enforce and the jurisdictional struggle between state and federal
governments would continue throughout the twentieth century.
64
United States v. Nice, 241 U.S. 591, 36 S.Ct. 696, 60 L.Ed. 1192 (1916).
65
Id. at 241.
66
Id.
29
Two significant events influenced federal Indian policy in the 1920s. The first
was the passing of the Indian Citizenship Act in 1924. Many Native Americans had
already achieved citizenship status before this act. In 1901, all of the Indians within
Oklahoma, the former Indian Territory, became citizens. The government also granted
citizenship to Indians who adapted Anglo-American culture and left tribal existence. In
1919, Congress determined that any soldier that had fought in World War I and was
given an honorable discharge could gain citizenship without losing any rights to tribal
property.67 As an outgrowth of this patriotic ideal, the American public called for the
extension of such a privilege to all Indians. Congress heeded this call in 1924, making all
Indians United States citizens. This label, however, did not end the right of an individual
to also be a tribal member. Congress protected property rights and ensured that the
federal trust responsibility remained intact. As the court in United States v. Nice had
determined, citizenship and tribal existence could coexist.
The second event was the introduction of John Collier as a major player in the
formation of Indian policy. Historian Francis Paul Prucha labels Collier the most
prominent figure in the history of American Indian policy. Collier’s work for the
People’s Institute of New York City, a group that helped immigrants adapt to life in
America by offering cultural lectures, exhibited his belief in building communities
through cooperative work rather than competition and a desire to replace materialistic
values with moral ones. A visit to the Pueblo Indians in the early 1920s led Collier to
believe that he could restore Indian culture, autonomy, and return the land to communal
ownership rather than individual allotment. Collier formed the American Indian Defense
67
Prucha, The Great Father, 267.
30
Association in 1923 as a means of protecting Indian rights. The association strongly
criticized the Bureau of Indian Affairs for a lack of concern for Indian needs. They
pointed to the failure of schools, poor health conditions on reservations, and the
tremendous loss of tribal land. Rather than forcing failed procedures upon tribes, Collier
advocated reforms that would recognize cultural pride and maintain traditional values.
His efforts were recognized at a national level, leading President Franklin D. Roosevelt,
with persuasion by Secretary of the Interior Harold L. Ickes, to appoint Collier as
Commissioner of Indian Affairs.68 Collier took office on April 21, 1933 during a decade
that became a watershed in federal Indian policy. A strong opponent of allotment, Collier
prepared legislation to attempt to reverse the disastrous consequences of this failed
initiative.
The Wheeler-Howard Act, also known as The Indian Reorganization Act passed
Congress on June 18, 1934.69 Excluding the Natives of Oklahoma and Alaska, the act
ended allotment across the rest of the nation and extended the trust period placed on
Indian lands for an indefinite amount of time, which could only be ended by
congressional action. The federal government returned remaining surplus lands that had
not been allotted to tribal ownership. The act prohibited sale or exchange of lands unless
the Secretary of the Interior deemed the exchange to be favorable to the goal of
consolidating Indian holdings. It created monetary funds to assist Indian nations
including $250,000 per year for tuition in vocational or trade schools, $10,000,000 in a
revolving fund for loans to foster economic development, and $250,000 per year for the
68
Prucha, The Great Father, 317.
69
Wheeler-Howard Act, 48 Stat. 984, 25 U.S.C. §461 et seq.
31
formation of chartered corporations and other tribal organizations.70 The establishment of
these corporations under Section 16 of the act was a step in the direction of granting some
autonomy to tribal groups. Any tribe could adopt a constitution and bylaws which would
become effective once approved by a majority of all adult members. The law gave tribal
governments the power to employ legal counsel, to prevent the sale or lease of tribal
lands, and to negotiate with federal, state, and local governments. However, one
overshadowing aspect of paternalism existed in all of these provisions; the Secretary of
the Interior still approved or denied everything. The Wheeler-Howard Act was not
arbitrarily forced upon Indian tribes. In a special election, each group had the choice to
accept or deny the act by majority vote. One-hundred and eighty one tribes accepted the
act, seventy-seven rejected it, and the government defaulted fourteen into acceptance by
failure to vote. Within ten years, ninety-three tribes had constitutions and bylaws and the
Secretary of the Interior granted charters to seventy-three groups.71
The Wheeler-Howard Act was just one of several ways that John Collier
attempted to promote the well-being of Native people. Collier also helped to organize
several organizations that mirrored those of Roosevelt’s New Deal. Roosevelt approved
the creation of the Indian Civilian Conservation Corps to combat poverty on reservations.
Much like the larger Civilian Conservation Corps, the Indian version maintained camps
for single and married men to help conserve reservation land and teach industrial skills.72
Other agencies such as the Public Works Administration, Works Progress
70
71
Wheeler-Howard Act, 48 Stat. 984, 25 U.S.C. §461 at §§ 9, 10, 11.
Prucha, The Great Father, 324.
72
Ibid., The Great Father, 320.
32
Administration, and Agricultural Adjustment Administration were beneficial to Indian
needs.
Despite these efforts, and the passing of the Wheeler-Howard Act, Collier faced
the political opposition that is common place in bureaucratic settings. His desire to create
an Indian Claims Commission to settle tribal land claims against the government faced
defeat in the Senate in 1937.73 Many politicians claimed that Collier’s initiatives called
for a reversion to tribalism and were against civilization and citizenship. The Senate
Committee on Indian Affairs prepared two vindictive reports that greatly harmed
Collier’s reputation and damaged his efforts to complete his vision for Indian tribes.
Finally in 1945, Jed Johnson, chairman of the House Appropriations sub-committee on
Interior Appropriations, threatened to cut tribal appropriations if Collier did not resign.
Tired of the political bickering, on January 19, 1945, Collier stepped down from his
position as Commissioner of Indian Affairs.
Collier’s plans held some shortcomings, including the fact that larger tribal
governments (such as the Navajo who rejected the act) did not always work for groups
accustomed to operating on a smaller traditional basis. While Collier believed that he
was reintroducing traditional culture among Indians, most Indians saw his efforts as
interference on the same level as past reformers. Additionally, the creation of tribal
organizations often led to factionalism within the tribe. In spite of these issues, Collier’s
perhaps misguided actions promoted cultural heritage and pride, gained respect for Indian
cultures amongst many whites, and gave impetus to the movement for tribal sovereignty.
At the time of his resignation, the idea of pan-Indian movements was taking hold. One
73
Prucha, The Great Father, 333.
33
such movement was founded in 1944; the National Congress of American Indians
promoted native interests on a national level.
International conflict also brought national recognition to Indians. As they had in
World War I, a large number of Native Americans answered the call of duty and enlisted
during World War II. Many lost their lives fighting side-by-side with fellow white
Americans. During war times at least, Native Americans gained a sense of equality with
their white counterparts.74 Many others also worked in defense industries, making a good
living wage. The access to earning good money both in defense and in the military was
the key to prosperity. However, the government did not see the fact that war times
brought access to good paying jobs for Indians; the government simply thought that
getting Indians off of reservations would lead to success. The postwar era brought a new
calling for a shift in Indian Policy. This change was the desire of the federal government
to once and for all end the federal trust responsibility over tribes, and bring Native
Americans under the same legal umbrella as the rest of mainstream society. The
Termination era had arrived.
The initial phase of termination brought the Indian Claims Commission.
Although the Senate had turned down the idea of a governing body to determine claims
during Collier’s time, the House of Representatives enacted the Indian Claims
Commission Act on August 13, 1946 and this time the Senate gave its approval.75 The
commission was designed to grant Indian tribes access to the courts, an action that had
previously required special permission from Congress. The I.C.C. gave tribes the
74
Prucha, The Great Father, 317-338.
75
Indian Claims Commission Act, August 13, 1946, H.R. 4497. Public Law 726.
34
opportunity to file any claim within a five year period. Congress believed that all claims
could be resolved within a ten year period, at which time the Indian problem would
finally be laid to rest. The I.C.C. was flooded with claims and its life was repeatedly
continued until it was finally dissolved in 1978. Although the commission allowed suit
concerning a variety of disputes, the majority of cases dealt specifically with land.
The Indian Claims Commission, originally comprised of a three person panel that
was expanded to five persons in 1967, held the task of first determining whether a tribe
held “original” or “recognized” title to land. The commission defined “original” title as
having exclusive rights to the area since “time immemorial.”76 In essence, if another tribe
disputed title to any holdings, the government could claim that it was incapable of
determining which group should be awarded compensation. In order to combat this
tactic, many tribes, including long time enemies such as the Pawnee and Lakota, agreed
to stipulations specifying clear boundaries between their lands. “Recognized” title had
been established in the past through various means such as treaties. However, as seen
through case law including the Marshall Trilogy, the difference between original and
recognized title mattered little. The fact remained that the government had long held the
point of view that it held ultimate title to the land being occupied by native groups.
Following the formality of naming the type of title a tribe held, the commission
determined the value of land, the amount of U.S. liability in each claim, and what amount
of value could be deducted for “gratuitous offsets.” Gratuitous offsets included
appropriations given for the tribe’s benefit.77
76
United States v. Santa Fe Pac. R. Co., 314 U.S. 339, 62 S.Ct. 248, 86 L.Ed. 260 (1942).
77
Indian Claims Commission Act, August 13, 1946, H.R. 4497. Public Law 726.
35
The problems of the Indian Claims Commission were profound. Its existence of
thirty-two years beyond Congress’ original goal is testament to this fact. In 1978, when
the commission was finally disbanded, a total of three-hundred and forty-two claims had
resulted in awards to tribes. The total monetary value of these awards equaled
$818,172,606.78 While this may appear to be a large sum, it is a small fraction of which
tribes were suing. On a consistent basis, the I.C.C. would devalue the price of land in
dispute, despite the fact that attorneys representing tribes were already asking for prices
well below market value. In addition, the payment assessed was valued in terms
reflecting the cost of land at the time of sale, not at the time of hearing. No consideration
was given for inflation, and interest was out of the question. The Fifth Amendment of the
U.S. Constitution states, “nor shall private property be taken for public use, without just
compensation.”79 If an average citizen sued and was victorious in the Federal Court of
Claims, then judgment would include both interest and inflation. However, it appears
that the I.C.C. could not afford to grant this Fifth Amendment protection because in
reality it had the potential of bankrupting the federal government. Along this same line
of thought, only a very few claims granted land such as the Lakota of the Black Hills and
Western Shoshone of Nevada. Congress only offered money to the overwhelming
majority of claims. The government could not possibly give back land that was now
owned by millions of individual citizens. If it had, the legal process would continue
indefinitely.
78
Indian Claims Commission, Annual Report, 1978.
79
U.S. Constitution, amend. 5.
36
The most nonsensical aspect of granting the final monetary award to tribes was
the subtraction of “gratuitous offsets.” Rather than taking the opportunity to further
promote economic well being of tribes, the government deducted for any assistance that
they may have provided even though those services were granted to the Indians in
treaties. This simply seems contradictory to the goal of making tribes self-reliant.
Overall, the Indian Claims Commission failed to achieve its goals. While the
commission did settle many claims, it did not end the federal trust responsibility and it
did not satisfy the needs of tribal members.
While the Indian Claims Commission was in the primary stage of receiving
claims, the federal government was attempting to terminate tribal relations by other
means. In testimony held on February 8, 1947, before the Senate Committee on Civil
Service, Commissioner of Indian Affairs William Zimmerman classified Indian tribes
into three groups for means of relieving the costly federal burden to tribes. The
classification was broken down into three separate time periods in which the federal
government could reduce or end any type of support or services. The first group would
be separated from government protection immediately, the second within ten years, and
the third would take more than ten years.80 Zimmerman insisted that his testimony was
not intended for the purpose of full-fledged termination, but Congress used his words as
an opportunity to proceed with termination plans.
The Legislative Reorganization Act of 1946 shifted Indian matters into the hands
of the Committee on Public Lands, later named the Committee on Interior and Insular
80
Prucha, The Great Father, 343.
37
Affairs.81 The committee exhibited a strong bias for termination reflecting the dominance
of western politicians who desired to end the federal trust relationship in the one
geographic area where Indians were still seen as an impediment to white civilization.
The most adamant of these politicians, Arthur V. Watkins of Utah helped in the adoption
of House Concurrent Resolution No. 108. The resolution stated:
It is the policy of Congress, as rapidly as possible, to make the Indians within the
territorial limits of the U.S. subject to the same laws and entitled to the same
privileges and responsibilities as are applicable to other citizens of the United
States, to end their status as wards of the U.S. and to grant them all of the rights
and prerogatives pertaining to American citizenship.82
Congress expressed its belief that all services should end and all offices of the Bureau of
Indian affairs should be closed within the states of California, Florida, New York, and
Texas. Additionally, Congress believed that the individual tribes of the Flathead of
Montana, the Klamath of Oregon, the Menominee of Wisconsin, the Potawatomi, and a
portion of the Chippewa who belonged to the Turtle Mountain Reservation in North
Dakota should also be terminated. Although House Concurrent Resolution 108 did not
hold the effect of law, the impetus to shift jurisdiction away from the federal government
had begun. Congress followed House Concurrent Resolution with one of the most
important, controversial, and debatable pieces of legislation concerning Indian affairs.
On August 15, 1953, Congress passed Public Law 280. This law amended Title
18 of the United States code by granting both criminal and civil jurisdiction over Indian
matters, with minor exceptions, to the states of Minnesota, Nebraska, Oregon, Wisconsin,
81
Prucha, The Great Father, 346.
82
H. Con. Res. 108, 83rd Congress, August 1, 1953, 67 Stat. B132.
38
and California.83 A mere two pages long, Public Law 280’s language led to many
disputes and controversies between state’s rights and tribal activists. The states listed
under Public Law 280 contend that they received full jurisdiction over Indian lands.
Tribal leaders instead argue that Public Law 280 grants only limited authority to states.
Section 4 (c) reads:
Any tribal ordinance or custom heretofore or hereafter adopted by an Indian tribe,
band, or community in the exercise of any authority which it may possess shall, if
not inconsistent with any applicable civil law of the State, be given full force and
effect in the determination of civil causes of action pursuant to this section.84
This is problematic in that determination of whether an Indian law was inconsistent with
a state civil law was often unclear. In the following decades this became an issue of great
concern, particularly in regards to Indian gaming. Congress initially named only five
states in Public 280, however section seven (7) allowed any state to adopt the act’s
provisions.85 With the hope that more states would assume jurisdiction, the federal
government actively pursued relinquishing responsibility over Indians.
Following the passage of Public Law 280, Congress initiated termination
legislation specific to individual tribes. The objective was to draw up a final tribal roll,
divide tribal property among enrolled members, and transfer trust property to
individuals.86 On June 17, 1954, the Menominee became the first federally terminated
tribe. The Klamath of Oregon and a steady flow of groups including California
Rancherias followed. Termination was disastrous for the Menominee; they were ill
83
Pub. L. No. 83-280, 67 Stat. 588, 18 U.S.C. §1162.
84
Pub. L. No. 83-280, 67 Stat. 588, at § 4.
85
Pub. L. No. 83-280, 67 Stat. 588, at § 7.
86
Prucha, The Great Father, 347.
39
prepared to cope with economic and societal realties alone. With federal aid gone, their
economy faltered and soon they found themselves destitute and plagued with bitter
factionalism causing division among their leaders. The first experiment with termination
was an utter failure. Congress grossly underestimated the profound economic and
psychological complications that would come with such a sudden transition.
A shift from Republican to Democratic leadership in the 1956 congressional
elections slowed the tide of termination. In 1962, the Ponca of Nebraska became the
final tribe to experience termination. Overall, the actual number of tribes terminated was
very small; a mere three percent of land and population was affected.87 However, Indian
groups lost most, if not all, of the little faith they held in the federal government. Further
legislation was met with skepticism and concern that the federal government was
abandoning the relationship that they were bound to recognize. Tribal leaders called for
restoration of land and assistance to terminated tribes. They also demanded a greater role
in their own future and the right to make decisions concerning their own people. As the
1960s began and the age of termination ended, the new era of Indian sovereignty, rights,
and self-determination came to the forefront of American Indian policy.
Social change throughout the 1960s motivated individuals, both Indian and nonIndian, to call attention to the problems existing within Native American communities.
Many of the issues were identical to those expressed by past generations such as poverty,
poor health care, and education. The failures of the federal government in addressing
these issues led activists to demand greater attention to Indian needs. However, those
calling for change believed the determination of which problems existed and their
87
Prucha, The Great Father, 348-349.
40
subsequent solutions should not be left solely to bureaucrats. They argued that tribal
governments and individual members should have the power to determine their own
future. The first step in achieving this goal was to bring some semblance of equality to
Indian people. Following the tide of the Civil Rights Movement in the 1960s that
transformed relations with historically neglected ethnic groups such as African
Americans and Hispanic Americans, Native Americans began asserting their positions in
a national forum. As a result of Native American activism and the precedent established
in the Civil Rights Act of 1964, Congress passed the Indian Civil Rights Act.88
The Indian Civil Rights Act of April 11, 1968, acknowledged the right of selfgovernment for Indian tribes with some limitations. Title II outlined ten limitations upon
tribal governments that guaranteed certain freedoms to tribal members. These limitations
were largely based upon the U.S. Constitution, and although this section is not an exact
replication of the U.S. Bill of Rights, its influence is clearly seen. Freedom of religion,
speech, the press, and assembly are outlined in section one. Other sections include
protection from illegal search and seizure, double jeopardy, and self-incrimination. One
difference from the U.S. Bill of Rights appears in section seven which puts a limitation of
six months imprisonment and/or a five-hundred dollar fine for punishment in tribal courts
for any single offense.89
Title III provided a “model code” for governing tribal courts which declared that
defendants being tried in an Indian court would be granted “the same rights, privileges,
and immunities under the United States Constitution as would be guaranteed any citizen
88
Pub. L. No. 90-284, 25 U.S.C. § 1301, et seq.
89
Pub. L. No. 90-284, at Title 2 § 202.
41
of the United States being tried in a federal court for any similar offense.”90 Regardless
of limitations the Indian Civil Rights Act placed upon tribal governments, the fact that
Congress recognized a tribal right to some form of self-government was an important
step towards the goal of self-determination.
One of the key elements of the Indian Civil Rights Act was title IV which
drastically altered the ability of state governments to obtain jurisdictional authority over
Indian tribes. As previously mentioned, Public Law 280 granted full jurisdiction with
minor exceptions to the states of Minnesota, Nebraska, Oregon, Wisconsin, and
California. Section seven of the law allowed any state to pass legislation enabling the
state to assume jurisdiction over Indian matters without tribal consent.91 Title IV altered
this dynamic by specifically stating that the consent of the tribe was prerequisite to any
transfer of authority.92 This consent could only be achieved by holding a special election
of all adult members of a specific tribe in which a majority vote was necessary for
approval. However, a specific requirement stipulated that either the tribal council or
twenty percent of adult members must first request that the election be held. A state
could not arbitrarily call for an election. These specifications were in great contrast to
those found in the termination era.
Section 403 of Title IV dealt the greatest blow to termination by repealing section
seven of Public Law 280. Congress asserted an ultimate position of control while
granting limited powers to tribes at the exclusion of state governments. However, section
90
Pub. L. No. 90-284, at Title 3 § 301.1.
91
Pub. L. No. 83-280, 67 Stat. 588, at § 7.
92
Pub. L. No. 90-284, at Title 4 §§ 401-402.
42
403(b) is problematic. Congress repealed section seven of Public Law 280, however, the
repeal only applied to areas that had not already been brought under state regulation:
“Section 7 of the Act of August 15, 1953 is hereby repealed, but such repeal shall not
affect any cession of jurisdiction made pursuant to such section prior to its repeal.”93
While Section 403(a) authorized a state that had enacted section seven of Public Law 280
to voluntarily give jurisdiction back to the federal government, nothing in the act
mandated such action. Further, the Indian Civil Rights Act made no mention of the states
that were initially named in Public Law 280 including California. This created a
potential conflict between federal, state, and tribal governments that would come to
fruition in the debates over Indian gaming.
The movement for self-determination and Indian rights did not stop with the
passage of the Indian Civil Rights Act. A new pan-Indian movement brought the plight
of Native Americans to the forefront of the social agenda. On November 20, 1969,
Native American activists seized Alcatraz Island in the San Francisco Bay, mockingly
offering $24.00 worth of beads for its purchase. The seizure lasted more than eighteen
months and gained substantial national media attention. The American Indian Movement
(AIM) followed with the “Trail of Broken Treaties.” Led by Dennis Banks, an
Assiniboine, and Russell Means, an Oglala Lakota, A.I.M. took a large caravan of people
to Washington D.C. hoping for acknowledgment of problems through peaceful
negotiations. When federal authorities declined to talk, the group occupied the Bureau of
Indian Affairs headquarters and refused to leave.94
93
Pub. L. No. 90-284, at Title 4 § 403.
94
Prucha, The Great Father, 366.
43
The most poignant moment in the Indian rights movement occurred in 1973 at the
Pine Ridge Reservation of South Dakota. This event originated from an internal dispute
amongst Oglala Lakota leaders and turned into an internationally publicized event.
Russell Means, A.I.M leader, accused tribal chairman Richard Wilson of being a Bureau
of Indian Affairs minion instead of representing tribal members and interests.95 Members
of A.I.M. seized control of the Wounded Knee trading post on February 27, 1973.
Federal agents soon surrounded the village and an intense armed stand-off ensued. For
seventy-one days, tensions ran high as press from around the world covered the event. In
the end, two members of A.I.M, Oglala Buddy Lamont and Cherokee Frank Clearwater,
died in the daily gunfire.96 While the Lakota Nation felt the aftermath of Wounded Knee
strongest, a reported sixty-four tribal members died of mysterious causes in the following
three years. The international media coverage offered the world a view of the depravity
and wide-spread problems existing on Native American reservations.97
From pre-revolutionary times to the seizure of Wounded Knee, the relationship
between the federal government and Indian nations was one of great complexity and
constant transformation. By the 1970s it was clear that Indian nations could no longer be
classified as “children” that were simply cared for by their “Great Father.” They did not
need or desire for the federal government to dictate their lives or future; yet they still
strongly believed that the government held a responsibility to care for them. They feared
termination and desired self-determination and tribal sovereignty. After decades of being
95
Prucha, The Great Father ,366-67.
96
William Redhawk, “Wounded Knee Siege: 1973: AIM,” Redhawk’s Lodge
http://siouxme.com/siege.html (accessed October 10, 2004).
97
Ibid.
44
ignored or disregarded as incompetent, tribal leaders, many of whom took an example
from the American Indian Movement, demanded that their concerns be heard. It was
with this political atmosphere that the courts reviewed several cases that either directly or
indirectly affected Indian gaming
45
CHAPTER 2
THE BIRTH OF INDIAN GAMING
The relationship forged among federal, tribal, and state governments, through
nearly two centuries of contact and conflict, became the prism though which the courts
handed down Indian gaming decisions. The 1960s atmosphere of social reform and
indigenous demand for self-determination carried though the 1970s and into the1980s.
With federal backing, tribal governments asserted aspects of self-rule, but state
governments were reluctant to grant tribal sovereignty in areas state officials believed
were subject to their jurisdiction. State trial courts, federal district and appeals courts,
and the U.S. Supreme Court soon found themselves adjudicating disputes between state
and tribal governments. Each of the following cases, whether directly or indirectly,
exerted profound ramifications for the existence of Indian gaming.
The Rincon Band of Mission Indians, located in San Diego County, made the first
attempt to open a tribal casino. On October 1, 1970, tribal leaders passed an ordinance
permitting the operation of a card room. The San Diego County Sheriff who believed
that the reservation might become a “little Las Vegas,” threatened the tribal participants
with arrest for violation of a local county ordinance. 1 The tribe filed suit with the United
States District Court, Southern District of California. In Rincon Band of Mission Indians
v. County of San Diego, District Judge Howard B. Turrentine issued an opinion
reminiscent of the days of termination. In referring to Public Law 280, the judge stated,
“The purpose of the legislation to make the Indians full and equal citizens, suggests that
1
Rincon Band of Mission Indians v. Cty. of San Diego, 324 F. Supp. 371 (1971).
46
the local governments would assume the same role in relation to Indian citizens as they
occupy with respect to the other citizens of the state.”2 He further declared, “There is no
reason to assume that local governments are not qualified and disposed to render fair
treatment to all of their citizens.”3 Through these statements, Judge Turrentine expressed
the belief that Public Law 280 granted full civil jurisdiction to state governments and
expanded this definition to include local governments. In the opinion of Turrentine,
tribal governments were inferior to state and local authorities, pronouncing that the state
must “protect the Indian from himself…”4 Consequently, Turrentine rendered judgment
against the Rincon declaring, “The court holds that the San Diego County gambling
ordinance is in full force and effect on the Rincon Reservation and may be enforced there
by defendants.”5
The Rincon appealed Turrentine’s decision to the Ninth Circuit Court of Appeals
where, on March 18, 1974, the appellate court issued an interesting ruling. In a 2-1
decision, the Ninth Circuit reversed the lower court and dismissed the case entirely.
Referring to Article III of the United States Constitution, the court found that this case
did not meet the “case or controversy” requirement.6 This means that a true dispute must
exist in order for the court to hear the case. San Diego had threatened to enforce its local
ordinance upon the Rincon; however, this ordinance had never previously been enforced
upon anyone. Therefore, the court concluded that a simple threat did not necessarily
2
Rincon, 324 F. Supp. at 371.
3
Id. at 375.
4
Id. at 376.
5
Id. at 378.
6
Rincon Band of Mission Ind v. Cty of San Diego, 495 F. 2d 1 (9th Cir. 1974).
47
translate into an inevitable arrest by county authorities. Before the court would hear the
case, the county would have to first arrest Rincon members or enforce the action against
another group. San Diego County did neither; thus, the Ninth Circuit declared that the
District Court had exceeded its jurisdiction and should never have accepted the case.7
The sole dissenter in this matter, Judge James Browning, believed that the threat of arrest
was sufficient to warrant examination. If Judges Ozell Trask and Thomas Murphy had
agreed with Browning, the court may have addressed a wide variety of issues related to
Indian gaming; however, due to the court’s dismissal, Judge Turrentine’s opinion became
moot. As a result, the case itself is rarely mentioned in the judicial record and is not
referenced as case law. The only mention is when a determination is made as to whether
litigation meets the “case or controversy” standard.
From the court records it appears that the Rincon abandoned their pioneering
efforts and closed the club, yet they made their historical mark as the first Indian Nation
to attempt to open a tribal casino. Many other tribes within and outside of California
eventually followed their lead. Prior to judicial forays into gaming, though, the courts
addressed many issues that, while not directly dealing with Indian gaming, indirectly
created profound ramifications for future gaming cases.
The 1973 Supreme Court ruling in McClanahan v. Arizona State Tax Commission
originated from a dispute over a mere $16.20.8 The appellant was a member of the Dine´
Nation of Arizona who earned all of her income from tribal sources on reservation land.
The State of Arizona imposed a state income tax upon her earnings and withheld $16.20.
7
Rincon, 495 F. 2d 1.
8
McClanahan v. Arizona State Tax Comm’n, 411 U.S. 164 (1973).
48
While this was not a large sum of money, it potentially established a troubling precedent.
Simply paying implied that the state had the right to tax income earned on reservation
land. The Dine´ viewed this action as a violation of tribal sovereignty. Tribal leaders
knew that if the state was allowed to impose such a tax, it could lead to state taxation on
reservations across the nation. This would profoundly impact tribal self-governance.
Fortunately, in a unanimous decision, the court ruled that “The State of Arizona has no
jurisdiction to impose a tax on the income of Navajo Indians residing on the Navajo
Reservation and whose income is wholly derived from reservation sources…”9 A victory
for Indian sovereignty, this decision involved much more than taxation.
In deciding McClanahan v. Arizona State Tax Commission, the court addressed
several important issues. First, the court defined the specific class of Indians who were
the subject of this decision declaring, “This case involves the narrow question whether
the State may tax a reservation Indian for income earned exclusively on the
reservation.”10 The court was unconcerned with Indians who were not residents of a
reservation, with reservation residents who worked off reservation, or with non-Indians
conducting business on a reservation. The court stated that the issue inherent in
McClanahan was the necessity to “reconcile the plenary power of the States over
residents within their borders with the semi-autonomous status of Indians living on tribal
reservations.”11 The court relied upon John Marshall’s opinion in Worcester v. Georgia
when defining Native Americans as having a “semi-autonomous status.” The special
9
McClanahan, 411 U.S. at 168.
10
Id.
11
Id. at 165.
49
relationship between federal and tribal governments at the exclusion of state authority is
omnipresent in the court’s opinion, “Indians and Indian property on an Indian reservation
are not subject to State taxation except by virtue of express authority conferred upon the
State by act of Congress.”12 Lacking this congressional act, it followed that the State of
Arizona was exceeding its jurisdictional limits. The court however, did not base its
ruling on a simple interpretation of Worcester v. Georgia which would allow the claim of
tribal sovereignty as an irrefutable defense in litigation involving issues of tribal selfgovernment: “The Indian sovereignty doctrine is relevant, then, not because it provides a
definitive resolution of the issues in this suit, but because it provides a backdrop against
which the applicable treaties and federal statutes must be read.”13
As detailed in the previous chapter, the concept of Indian sovereignty has
undergone many modifications since the time of John Marshall. Changing circumstances
such as tribal members leaving the reservation and entering the “general community”
forced the court to adjust the principles of Worcester to contemporary times; “Similarly,
notions of Indian sovereignty have been adjusted to take account of the State’s legitimate
interests in regulating the affairs of non-Indians.” The court noted that in instances where
“essential tribal relations were not involved and where the rights of Indians would not be
jeopardized,” state courts have tried cases involving non-Indians on reservation land.14
Cases that solely involved “tribal Indians,” a term used to classify members of a tribe
living on a reservation as opposed to non-Indians or “urban” Indians, were left to federal
12
U.S. Dept. of the Interior, Federal Indian Law 845 (1958).
13
14
McClanahan, 411 U.S. at 172.
Id. at 171.
50
discretion. The opinion of the court states, “the trend has been away from the idea of
inherent Indian sovereignty as a bar to state jurisdiction and toward reliance on federal
pre-emption.”15 Tribal leaders could not simply claim sovereignty as a means of
preventing state interaction. Concurrently, without specific legislation from Congress, a
state could not simply interfere in tribal affairs: “Essentially, absent governing Acts of
Congress, the question has always been whether the state action infringed on the right of
reservation Indians to make their own laws and be ruled by them.”16 The confusion
inherent in these statements would lead to many arguments concerning the limitations of
state authority and tribal sovereignty, particularly in regards to Public Law 280.
An underlying issue with the court in McClanahan and in the majority of cases
concerning Indian sovereignty is the interpretation of Public Law 280. Reviewing the
details of Public Law 280 discussed in the first chapter, when the act passed in 1953, five
states received full legal authority over civil matters concerning Indians. Arizona was not
one of these states, but did have the opportunity to assume jurisdiction under section
seven without tribal consent. When the Indian Civil Rights Act became law in 1968,
Title IV amended section seven to require a majority tribal vote before accepting state
control. Arizona failed to act, however, within the fifteen year time period between
Public Law 280 and the Indian Civil Rights Act.17 Therefore, the state had to acquire the
Dine´’s consent before asserting taxation authority. The McClanahan court clearly
demonstrated that Arizona had not met this requirement. Arizona, thus, could not tax
15
16
McClanahan, 411 U.S. at 172.
Id. at 171-172.
17
Court documents do not indicate why Arizona neglected to assume jurisdiction, however the
reasons why they did not act are not as important as the simple fact that they did not.
51
individual tribal members or the tribe itself as a legal entity. “In fact, we are far from
convinced that when a State imposes taxes upon reservation members without their
consent, its action can be reconciled with tribal self-determination.”18
Even if the Dine´ had accepted state taxation, the court would not have
necessarily been willing to approve state action. For example, in the case of Kennerly v.
District Court19 the Blackfeet Tribe of Montana voted to accept state jurisdiction, yet,
even though the Blackfeet consented, the state failed to follow federally prescribed
procedural steps for assuming control. While this was a technicality, it effectively
stopped Montana’s efforts. The court ruled that while the right to tribal self-government
had not been infringed, the state still could not proceed in asserting authority over the
tribe. Following suit, the McClanahan court stated, “If Montana may not assume
jurisdiction over the Blackfeet by simple legislation even when the Tribe itself agrees to
be bound by state law, it surely follows that Arizona may not assume such jurisdiction in
the absence of tribal agreement.”20 In concluding their reversal of the Arizona Court of
Appeals, the Supreme Court ruled that, “the State is totally lacking in jurisdiction over
both the people and the lands it seeks to tax.”21 The court had granted a victory to tribal
sovereignty; however, the battle between state and tribal governments was far from over.
In 1976, the Supreme Court again faced the issue of state taxation on reservation Indians.
This time a greater discussion and clarification of the intent of Public Law 280 was
addressed.
18
19
Kennerly v. District Court, 400 U.S. 423 (1971).
20
21
McClanahan, 411 U.S. at 179.
McClanahan, 411 U.S. at 180.
Id. at 181.
52
The Supreme Court decided Bryan v. Itasca County on June 14, 1976. Similar to
McClanahan, the dispute concerned Minnesota’s implementation of state property tax on
the mobile home of Russell Bryan. Bryan was an enrolled member of the Assiniboine
Nation living within the boundaries of the tribal reservation. Once again, the issue was
not the $147.95 requested by the state, but the fact that the state was taxing Indian-held,
reservation property. Minnesota contended that Public Law 280 granted civil jurisdiction
under Section 4 (a) included taxing authority. The state used the principle of “negative
implication” in reaching this conclusion.
The use of negative implication is similar to “reading between the lines.” An
illustration will clarify the concept. Reading a list of restricted food products for a child
with allergies that includes peanuts, almonds, walnuts, and pecans, one might conclude
that cashews are acceptable. Because the list does not restrict all nut products or byproducts, the negative implication is that cashews are harmless to the child. However, if
the omission of cashews is an oversight, the consequences of giving the child this nut
could result in serious harm and even death. The state of Minnesota addressed section 4
(b) of Public Law 280 in a similar manner to this example. Section 4 (b) excluded the
taxation of property held in trust by the United States for Indian peoples.22 Congress
specifically prohibited taxation of trust property and did not express a position on nontrust property; therefore the state Supreme Court presumed that taxation of non-trust
property was permissible. The Assiniboine objected to such a broad interpretation of
Public Law 280 and sought the United States Supreme Court’s intervention. Referencing
McClanahan, the U.S. Supreme Court stated that precedent had been established in
22
Bryan v. Itasca County, 426 U.S. 373 (1976), at 374-376.
53
dealing with the question of taxation. Only by a clear desire of Congress could states
assume such jurisdictional authority as the right to tax. It was now the objective of the
court to determine whether Congress had made such an intention in the passing of Public
Law 280 or whether the omission of taxation of non-trust property was a simple
oversight.
In a similar manner to the decision of McClanahan v. Arizona State Tax
Commission, the court in Bryan v. Itasca emphatically rejected the Minnesota Supreme
Court’s ruling and reversed its decision. Taking a narrower interpretation than that of the
state court, the U. S. Supreme Court declared that, “Public Law 280 was plainly not
meant to effect total assimilation.”23 The court reached this conclusion by examining the
legislative history behind the act. The court claimed that Congress passed Public Law
280 with the main concern of solving the “problem of lawlessness on certain Indian
reservations, and the absence of adequate tribal institutions.”24 Further, the court
contended that the focus of Public Law 280 was on criminal rather than civil actions as
many tribes simply lacked the resources for dealing with criminal activity.25 Thus,
Congress granted the states the authority to control this problem and nothing more. In a
similar fashion, in cases where tribal groups lacked adequate forums for the resolution of
civil actions Congress granted access to state courts for the resolution of civil disputes.26
Minnesota interpreted this as a congressional grant of civil jurisdiction over Indian tribes.
The Supreme Court, however, strongly disagreed with this position. The court explained
23
Bryan, 426 U.S. at 374.
24
Id. at 379.
25
Id. at 380.
26
Id. at 383.
54
that, within the language of Public Law 280, there was an “Absence of anything remotely
resembling an intention to confer general state civil regulatory control over Indian
reservations.”27 Rather, “the primary intent of Section 4 was to grant jurisdiction over
private civil litigation involving reservation Indians in state court.”28 Congress granted
tribes voluntary access to the courts, not forced allegiance to them.
The court further addressed the fact that Congress had implemented several
individually distinct “termination acts” that made certain Indian groups subject to state
authority. Public Law 280 was a precursor to these specific termination acts, and
communicated congressional intent to transfer aspects of federal authority to the states;
however, its language was not as explicit as the later acts, thus leaving it open to judicial
interpretation. The court concluded that Congress, if it so desired, had the capability of
putting tribal governments under the total jurisdiction of state governments. Yet in
Public Law 280, this was clearly not the intention of Congress, “…if Congress in
enacting Pub. L. 280 had intended to confer upon the States general civil regulatory
powers, including taxation, over reservation Indians, it would have expressly said so.”29
The court, thus, used the principal of negative implication in an opposite manner than that
of the state courts. Because express language was not included in Public Law 280 as it
had been in several termination acts, it became negatively inferred that Congress did not
intend to bring tribal governments completely under the jurisdiction of the state. Rather
27
Bryan, 426 U.S. at 381.
28
Id. at 385.
29
Id. at 388.
55
than an interpretation that allowed taxation, the Supreme Court declared that, “Congress
did not mean in Section 4 (a) to subject reservation Indians to state taxation.”30
It is important to understand the struggle between state and tribal governments as
a backdrop to the gaming issue. In both McClanahan v. Arizona State Tax Commission
and Bryan v. Itasca, the issue of the congressional intent of Public Law 280 is paramount.
The dichotomy of “criminal/prohibitory” versus “civil/regulatory” was evolving through
both cases. This debate soon became the focal point of the majority of future litigation
between state and tribal leaders. An illustration can, hopefully, provide further clarity.
The Clerk’s Office at the Orange County Superior Court in Santa Ana, California is
separated into two main departments: civil and criminal.31 In criminal matters, if a
person is charged with a crime, then he or she must face prosecution to defend
themselves against the accusation or plead guilty to the offense. Either way, they have no
choice in whether to go to court. Conversely, if a dispute is considered a civil matter, the
issue does not necessarily have to go to trial. A party seeking restitution can settle out of
court, seek mediation, or choose to disregard the matter entirely. It takes a voluntary
action by at least one individual to initiate a case in the civil division.
Applying this example to congressional intent in Public Law 280, the
McClanahan and Bryan courts determined that, in states where jurisdiction had been
transferred from the federal government, Indians were compelled to adhere to state laws
in criminal matters, but were not forced into similar adherence in civil issues. In both
McClanahan and Bryan, the respective courts found that state governments had exceeded
30
Bryan, 426 U.S. at 390-393.
31
Technically there are four divisions including traffic and family law, but for the purpose of this
example only mentioning civil and criminal is sufficient.
56
their authority in implementing civil laws over tribal governments. While on the surface
the cases specifically addressed taxation, the core issue was Congress not intending for
Public Law 280 to grant states full civil authority over tribal governments, but rather to
give tribal governments a forum in which to resolve civil disputes if they so desired.32
Those groups that maintained adequate tribal courts to resolve private civil disputes were
exempt from filing actions in state court.
Expanding upon the definition of “civil/regulatory” versus “criminal/prohibitory,”
if a state completely prohibits an action it is classified as “criminal.” Conversely, if an
action is simply regulated it is deemed “civil.” For example, using cocaine in any
manner is illegal and punishable in criminal court within California, yet drinking alcohol
is not illegal if the consumer is over the age of twenty-one. It can lead to illegal activity
such as public intoxication or drunken driving, but the act in itself is not prohibited, but
regulated. One example of this type of regulation is laws mandating that businesses must
obtain a license in order to sell alcohol. Derived from the Supreme Court’s definition of
the two classifications, disagreements ensued over which laws should be treated as
civil/regulatory and which should be criminal/prohibitory. So, while Indian gaming was
entering its infancy, state and federal courts were struggling with the question of what
constituted sovereignty and self-determination and what was a violation of the law and
public policy. This debate continued with the opening of a casino on reservation land in
the state of Washington.
In 1978 and 1979, Native American and “non-Indian” entrepreneurs operated a
casino within the borders of the Puyallup reservation. Located one mile from Tacoma
and twenty-five miles from Seattle, the casino catered to a large number of non-Indian
32
Bryan, 426 U.S. at 387-392.
57
customers including out of state visitors. The casino’s success drew the attention of
groups including state officials and law enforcement personnel who arrested the casino’s
owners. The District Court for the Western District of Washington convicted the four
Puyallup owners: Harold Farris, Jody Satiacum, Bertha Turnipseed, and Mackenzie
Turnipseed along with the five non-Indian owners: Allen Dudley Powell,33 Louis J Baker,
Ray Turnipseed, David Painter, and Melvyn Lockwood, of violating Title 18 of the
United States Code, section 1955 entitled the Organized Crime Control Act of 1970.34
Although the title “Organized Crime Control Act” would seem to encompass a wide
range of activities associated with the mafia, the act solely deals with illegal gambling.
Gambling is defined as “pool selling, bookmaking, maintaining slot machines, roulette
wheels or dice tables, and conducting lotteries, policy, bolita or numbers games or selling
chances therein.”35 If five or more individuals operate a gambling business that “is a
violation of the law of a State or political subdivision in which it is conducted,” they may
face prosecution resulting in up to five years imprisonment and/or monetary fines.36 The
act further stated that gambling establishments in continuous operation for thirty days, or
those making in excess of $2,000.00 in any single day, were in violation of the law;
however, for purposes of obtaining warrants for arrest and/or investigation, officials only
needed to suspect a business of operating for two or more consecutive days and profiting
33
Powell was one-fourth Cherokee; however, the Court found him to be a “non-Indian” for
purposes of this case, as the Cherokee were not a tribe organized within the state of Washington.
34
United States v. Farris, 624 F.2d 890 (9th Cir. 1980).
35
18 U.S.C. § 1955 at § 2.
36
18 U.S.C. § 1955 at § 1.
58
more than $2,000.00 in any twenty-four hour period.37 Finally, any property used in an
illegal casino could be seized and forfeited to the federal government.38 Using the
Organized Crime Control Act, government authorities claimed the “possibility” of mob
take over as the argument to prevent casino gaming on Indian lands. This act provided
the background for the ruling of the Ninth Circuit Court of Appeals in United States v.
Farris.
Circuit Judge Herbert Choy’s written opinion for the Ninth Circuit Court reads
more as a personal vendetta against gambling as a whole, rather than a decision based
purely upon legal fact. Instead of stating that Congress must specifically prohibit an
action by tribal governments, as the Supreme Court did in both McClanahan and Bryan,
Judge Choy asserted that “there would have to be specific language permitting gambling”
within the treaty formulated between the United States and the Puyallup.39 It is difficult
to imagine that during the treaty making process, either the federal or tribal government
would have thought to include specific language concerning casino style gambling within
the terms agreed upon. Using this logic, any advancement in technology leading to a
specific action would require the amending of the original treaty. This is simply illogical.
However, this statement was less disturbing to advocates of Indian gaming than the
Judge’s apparent bias against any form of gambling:
Puyallup casinos in the Tacoma-Seattle area would flourish as mightily as those in
such areas as Las Vegas and Atlantic City. Casinos on Indian land would defeat or
37
18 U.S.C. § 1955 at §§ 2-3.
38
Congress amended the Organized Crime Control Act in 1986 to exempt bingo, lotteries, or other
similar games operated by charitable organizations. 18 U.S.C. § 1955 at § 3(e).
39
Farris, 624 F. 2d at 893.
59
endanger the federal interests of protecting interstate commerce and preventing the
takeover of legitimate organizations by organized crime.40
Moreover, the other major evil of large-scale gambling- the harm to the national
economy- arises regardless of whether a casino is on Indian or non-Indian land,
especially when the clientele is not limited to Indians.41
These statements did not appear to be based upon the legal issue at hand. Judge Choy
made a speculative assumption that casinos upon reservation land could flourish and rival
those of Las Vegas or Atlantic City. Further, Choy did not provide any factual evidence
that gambling “harms the national economy.” Judge Choy’s declaration that gambling
was “evil” can be viewed as a subjective personal opinion.
Judge Choy based his opinion upon a broad interpretation of the Organized
Crime Control Act. He declared that the underlying policy behind section 1955 is that
“large-scale gambling is dangerous to federal interests wherever it occurs.”42 In Judge
Choy’s opinion, “The casino operations placed the tribe in danger of mob takeover,
whether it realized it or not.”43 It was of little concern that there appeared to be no proof
of any such takeover. The simple idea that it could become a possibility made the act an
illegality in Judge Choy’s mind. The mythology of mob control seemed to consume the
judge, “Moreover, the harm to the federal interests protected by section 1955 of a casino
on Puyallup land would be as great as that flowing from a similar casino in San Francisco
or Chicago.”44
40
Farris, 624 F. 2d at 893.
41
Id. at 895.
42
Id.
43
Id.
44
Id. at 896.
60
Choy came to the conclusion that the Organized Crime Control Act’s
congressional intent of limiting or preventing large scale gambling outweighed the
federal interests of granting self-rule to Indian tribes. Further, because the casino
serviced a large number of non-Indians, Choy believed that jurisdiction fell to the state
rather than the tribe: “Also, operating a casino with a non-Indian clientele is not an
offense committed by one Indian against the person or property of another Indian.”45 The
opinion notes the fact that Public Law 280 did not include jurisdiction over Puyallup
land; however, in 1963 the State of Washington passed legislation under section seven of
the act to assume criminal and limited civil jurisdiction. Washington enacted this
legislation before the Civil Rights Act of 1968; therefore, the Puyallup’s consent to state
control was not required. The state specifically took jurisdiction over eight subject areas,
none of which included gambling.46 Judge Choy conceded the fact that, “Washington
cannot enforce its gambling laws against the Puyallup appellants for their actions on
Puyallup trust lands…” Despite this concession, he found that, “Washington public
policy prohibits the type of gambling business conducted by appellants.”47 Therefore, he
found casino gambling to be a prohibitory action and subject to criminal jurisdiction
described under Public Law 280. Choy cited the Ninth Circuit’s previous decision of
United States v. Marcyes48 that declared the possession of fireworks, whether sold by
Indian or non-Indian merchants, to be a public hazard and therefore a prohibitory act. He
stated that “Washington’s prohibitory (but not regulatory) laws can be enforced by the
45
Farris, 624 F. 2d. at 897.
46
Id. at 894.
47
Id. at 895.
48
United States v. Marcyes, 557 F. 2d 1361 (9th Cir. 1977).
61
federal government on the Puyallup reservation.” Yet, in ruling, Choy expanded the
definition of civil/regulatory versus criminal/prohibitory. No longer was the
classification simply based on written law, but on an interpretation of public desire. This
finding would prove vital to future decisions, and would help to open the debate as to
what constitutes a violation of public policy.
An underlying problem in the Farris decision is that the ruling is selfcontradictory. Judge Choy conceded that the Puyallup appellants were beyond the
jurisdiction of the state; yet, he still declared them guilty of “violating the law of a state”
under section one of the Organized Crime Control Act. In sum, although the State of
Washington had no means by which to punish the Puyallup appellants, they nevertheless
could convict them of breaking the law. If this statement seems confusing, it is because
of the fact that it is just that, confusing. Choy argued that the Indian appellants were
aware of their actions and declared that, “Moreover, these appellants were not tripped up
by a detail, but flagrantly violated the core of the state law, albeit they were beyond the
state’s jurisdiction.”49 In a 2-1decision, the Ninth Circuit affirmed the conviction of the
Puyallup appellants.
Judge Choy’s decision led to many questions: If the appellants knew that they
were under state jurisdiction, why would they purposely break a law in a manner that
would draw so much attention upon themselves? Was this not self-destructive and a risk
to their profitable business? Did the Puyallup simply believe that they operated under
tribal law and had created a successful enterprise? Finally, how can a court find that a
group is beyond a state’s jurisdiction, have no means of punishing the accused
49
Farris, 624 F. 2d at 897.
62
defendants, but still find them guilty and uphold their convictions?
The one vote to
reverse the convictions addressed some of these questions.
The lone dissenter in this case, Judge James Browning, harshly criticized the
majority opinion. Although he concurred in the conviction of non-Puyallup appellants,
Browning felt that Choy’s interpretation of the Organized Crime Control Act was
“untenable.” Taking a more narrow reading of the act, Browning concluded that, “The
idea that a person can transgress state law by conduct not punishable under that state law
is inconsistent with minimum notions of notice and fairness.”50 Browning argued that
Choy’s contention that a person could be convicted for a crime that they could not in turn
be punished for was irrational. Further, the idea that the Organized Crime Control Act
denounced of all gambling was, in Judge Browning’s opinion, contrary to the legislative
history of the act. Congress was simply concerned with illegal gambling, not gambling
itself: “Congress was not concerned with gambling per se. The statute was addressed to
what Congress perceived as a vicious circle of illegal gambling resulting in large profits
which the criminal element then used to corrupt local officials…”51 In Browning’s view,
the Puyallup were not vulnerable to this corruption because they were beyond the sphere
of state influence. Unlike areas where the mafia controlled illegal gambling, the Puyallup
had nothing to gain in bribing state officials: “In the case at hand, for example, there was
no need for the Puyallups to bribe state officials when there was no law under which the
50
Farris, 624 F. 2d at 898.
51
Id. at 899.
63
state could prosecute them.”52 According to Browning, the threat of organized crime was
simply not as strong as Judge Choy had envisioned.
Overall, Judge Browning contended that the state should not impede tribal
sovereignty, “Congress did not intend to assert federal jurisdiction where state law
allowed no local law enforcement at all.” The State of Washington did not assume
jurisdiction over gambling when it utilized section seven of Public Law 280. Therefore,
gambling upon the Puyallup reservation was a regulatory rather than prohibitory action
and should not be subject to criminal laws. Judge Browning concluded, “Because no
state or local law prohibited the actions of the Puyallup defendants, 18 U.S.C. section
1955 does not apply. The convictions of these defendants should be reversed.”53
Unfortunately, he was a lone dissenter. The Puyallup convictions were upheld. Browning
held no objections to the convictions of the non-Indian appellants and concurred in the
affirmation of their convictions. Unlike the dismissal in Rincon Band of Mission Indians
v. County of San Diego, the Ninth Circuit’s ruling in United States v. Farris provided a
substantial beginning to court involvement in Indian gaming. While, the decision did not
resolve the debate between civil/regulatory and criminal/prohibitory, it set an important
precedent in making public policy an important factor in determining which laws were
criminal or civil. Although United States v. Farris involved a majority of non-Indian
owners and operators, it would only be a short time before the courts would be faced with
the issue of casinos owned solely by Native Americans.
52
Farris, 624F. 2d at 899.
53
Id.
64
Casino gaming came to the forefront of Indian matters during the 1980s. Rather
than imitating large Las Vegas style establishments, Indian casinos initially operated on a
small scale. Instead of slot machines and table games, tribal operations focused in large
part on one facet of gaming: bingo. The opening of several reservation bingo halls led to
court intervention in the struggle between state and tribal interests concerning gaming.
Three different courts in Wisconsin, Florida, and California respectively, heard separate
cases within the span of seventeen months. These courts questioned whether tribal bingo
operations were within state jurisdiction or were an aspect of tribal sovereignty. The
cases were virtually identical in their factual background and circumstances that led to
litigation. They were so similar that each written opinion often cross-referenced one or
possibly both of the other decisions. Collectively, the cases were of great importance to
the attempts of tribal governments in operating gaming free of state involvement.
The United States District Court, Western District of Wisconsin handed down
their opinion in Oneida Tribe of Indians of Wisconsin v. State of Wisconsin on July 27,
1981.54 Shortly thereafter, on October 5, 1981, the United States Court of Appeals, Fifth
Circuit rendered judgment in Seminole Tribe of Florida v. Butterworth.55 Concluded less
than three months apart, these cases are mirror images of each other. In both, the
respective tribes had enacted tribal ordinances for the regulation of bingo parlors. Oneida
tribal members operated their bingo hall, without any outside assistance, as a means of
“promoting the health, education and welfare of the members of the Tribe and the Oneida
54
Oneida Tribe of Indians of Wis. v. State of Wis., 518 F. Supp. 712 (1981).
55
Seminole Tribe of Florida v. Butterworth, 658 F. 2d 310 (5th Cir. 1981).
65
Community.”56 The Seminole held the same goal of improving the quality of life for
their tribal members; however, unlike the Oneida, the Seminole contracted a private
partnership to construct and manage their business in exchange for a percentage of the
profits from bingo games.57 In either case, the principal function of bingo halls was to
raise money to promote the well-being of each respective tribe. Besides the costs of
overhead, and in the case of the Seminole, management fees, all monies went to the
greater benefit of the tribe, and not for personal gain. The Oneida and Seminole made it
clear that these were not efforts to make some individuals wealthy. Despite visions of
societal improvement, state officials threatened to close tribal businesses.
On February 1, 1980, the Oneida tribe received a letter threatening “enforcement
action” from Brown County, Wisconsin assistant District Attorney Royce A. Finne. On
December 15th of the same year, the Brown County Sheriff informed the tribe that they
were in violation of Wisconsin Statute 163 which allowed for the prosecution of
individuals operating unauthorized bingo games.58 In Florida, Broward County Sheriff
Robert Butterworth issued a similar warning. He declared that the Seminole were in
violation of Florida Statute Section 849.093, and would suffer adverse consequences if
they did not shut down.59 Neither the Oneida nor Seminole accepted what they viewed as
a blatant infringement upon their right to self-government. Both tribes sought judicial
intervention to prevent interference from either Wisconsin or Florida. Once again, the
56
Oneida, 518 F. Supp. at 713.
57
Seminole, 658 F. 2d at 1.
58
Oneida, 518 F. Supp. at 713.
59
Seminole, 658 F. 2d at 2.
66
respective courts addressed the criminal/prohibitory versus civil/regulatory classification
issue.
The Fifth Circuit Court of Appeals and the United States District Court, Western
District of Wisconsin reached identical conclusions in deciding this matter. State views
held that the statutes regulating bingo were criminal/prohibitory based upon the premise
that violation of these laws could result in criminal prosecution. The tribal governments,
on the contrary, contended that the state’s role was merely regulation of bingo, not
prohibition. Tribal attorneys illustrated that both Wisconsin and Florida allowed
“charitable or fraternal” organizations to operate bingo games.60 While the states limited
the amount of prizes or the number of games allowed, they nonetheless permitted the
playing of bingo. Both courts relied heavily upon Judge Choy’s previous definition of
“public policy” in United States v. Farris. As mentioned, Choy cited the case of United
States v. Marcyes in which the State of Washington successfully prohibited the Puyallup
Indians from selling fireworks. Washington prohibited any individual, regardless of race
or status from selling fireworks. The state believed that fireworks were unsafe and a
public hazard; therefore, the Puyallup were violating the public policy of the state.
Although Judge Choy incorrectly applied this prescript to the Puyallup gaming efforts, he
established the principle that the classification of a law as criminal/prohibitory or
civil/regulatory relied largely upon the public policy of each individual state.61
Wisconsin and Florida both claimed that, since penal sanctions could be enforced
for violation of bingo statutes, their laws were inherently criminal/prohibitory. The
60
Oneida, 518 F. Supp. at 713-715; Seminole, 658 F.2d at 1.
61
Farris, 624 F. 2d at 892-97.
67
courts disagreed with these contentions. The simple fact that a statute might include the
possibility of criminal prosecution did not automatically classify it as
criminal/prohibitory.62 The precedent established in Farris required that the public
policy of a state must be accounted for in determining the proper classification of a
particular law. The Oneida and Seminole decisions similarly concluded that tribal bingo
operations were not in opposition to public policy. In Wisconsin, the court declared that,
“Congress intended to limit the exercise of that jurisdiction to enforcement of laws
generally prohibiting activities that the state determined are too dangerous, unhealthy, or
otherwise detrimental to the well-being of the state’s citizens.”63 The courts could not
believe that either state felt that bingo caused a threat to the general welfare of its
citizens. Additionally, Wisconsin and Florida allowed people to participate in games
operated by a variety of organizations. To allow these games at the exclusion of tribal
bingo halls would be discriminatory. The courts found it clear that Wisconsin and
Florida chose to regulate rather than to prohibit the playing of bingo by the general
populace; making the bingo statutes of each state clearly civil/regulatory. These
conclusions greatly influenced all tribes wishing to pursue Indian gaming, including those
in California.
Following the rulings of the United States District Court and the Fifth Circuit
Court of Appeals, California had the chance to address the issue of Indian bingo
operations. On April 20, 1981, the Barona Tribe, located in San Diego County, enacted a
tribal ordinance permitting bingo games within their reservation. Like the Seminole in
Florida, the tribe contracted an outside corporation to manage their bingo hall. On June
62
Oneida, 518 F. Supp. at 718.
63
Id. at 720.
68
25, 1981, officers representing San Diego Sheriff John Duffy declared that the Barona
violated California Penal Code section 326.5, which regulated the operation of bingo
games.64 A state trial court denied the Barona tribe’s motion for summary judgment
which included a request for injunctive and declaratory relief against Sheriff Duffy. The
tribe appealed this denial at the federal level.65
On December 20, 1982, the Ninth Circuit Court of Appeals issued a very brief
opinion in Barona Group of Capitan Grande Band v. Duffy.66 The similarities that
Barona shared with the Oneida and Seminole cases simplified the Ninth Circuit’s
decision making process. As in Wisconsin and Florida, California permitted “charitable
organizations” to conduct bingo games. The court found that this fact illustrated that
bingo was not a violation of California’s public policy. As Circuit Judge Robert
Boochever wrote in the court’s opinion, “This intent to better the Indian community is as
worthy as the other charitable purposes to which bingo proceeds are lawfully authorized
under the California statute.”67 The court could not comprehend how the state intended
to justify allowing one group to participate in bingo while prosecuting another group for
the same act. The Ninth Circuit reversed the lower court’s decision and remanded the
64
Barona Group of Capitan Grande Band v. Duffy, 694 F. 2d 1185 (9th Cir. 1982), at 1187.
65
A motion for summary judgment is a method in which a party attempts to convince the court that
judgment should be entered in their favor based on the legal merits of a case without going to trial. The
Barona felt that the state held no legal grounds for prohibiting their bingo games and therefore felt that a
trial would simply be a waste of everyone’s time. Injunctive relief means that, through a court order, a
particular action is prevented from occurring. In the case of the Barona, the tribe sought to prevent Sheriff
Duffy from enforcing California’s penal code against their bingo hall. Declaratory relief means that,
without awarding damages or ordering any type of action, a court declares that a party has particular legal
rights under a contract or statute. In this case, the Barona were seeking a declaration from the court that
they held the right to operate bingo halls according to legal statute.
66
67
Barona, 694 F. 2d 1185.
Id. at 1190.
69
case back to the trial court for purpose of entering summary judgment in favor of the
Barona. This case represented the first victory for Indian gaming rights in California;
however, as casinos expanded from bingo to other forms of gambling, California
continued to be a focal point in the Indian gaming controversy.
On May 24, 1980, the Cabazon Band of Mission Indians located in Riverside
County, California enacted Tribal Ordinance No. 5.7.68 This ordinance regulated a card
club similar to others in the metropolitan Los Angeles area. The ordinance permitted the
wagering upon and playing of draw poker, lowball draw poker, and panguingue (a game
similar to rummy and often referred to as Pan 9). The club was on the Cabazon
reservation, catering to tribal members and the general public alike. On October 18,
1980, a mere two days after opening, the Chief of Police for the City of Indio, Samuel
Cross, along with several Indio Police officers raided the club. Citing local city code
sections 15.15, 15.16, and 15.17, the officers issued over 100 citations to employees and
customers alike, both tribal members and non-members.69 The Cabazon filed suit with
the District Court for a restraining order and a preliminary injunction. The court denied
the restraining order and granted the preliminary injunction, but later dissolved this
injunction. The tribe then filed a motion to vacate judgment that the court denied;
however, the court restored the injunction against the City of Indio pending appeal. The
Ninth Circuit Court of Appeals heard the Cabazon case and rendered decision on
December 14, 1982.70
68
Cabazon Band of Mission Ind. v. City of Indio, 694 F. 2d 634 (9th Cir. 1982), at 636.
69
Id at 636.
70
Id.at 635.
70
The Ninth Circuit found that Cabazon Band of Mission Indians v. City of Indio
posed three issues. The first concerned the city’s attempted annexation of reservation
land in 1970. The second question raised was whether the city of Indio held jurisdiction
to enforce its ordinance on the reservation. And lastly, if Indio did have jurisdiction, did
that jurisdiction extend to non-Indians on the reservation? Of these three questions, the
court addressed only the first. In a brief opinion, Circuit Judge Thomas Tang ruled that
the City of Indio’s annexation of Cabazon land was void “ab initio,” meaning “from the
beginning.”71 The city failed to gain the consent of either the federal government or the
Cabazon when claiming reservation land for its own purposes. This was a violation of
former California Government Code sections 35470-71. The city claimed that the statute
of limitations for a challenge of annexation had expired; however, the Ninth Circuit
refuted this weak argument. Essentially, the court found that Indio’s purported
annexation was ineffective, and therefore, tribal land was not within their jurisdiction.
The court declared that, “Absent federal consent, Indio had no authority to act at all.”72
Thus, the final two issues proposed on appeal became moot. The court would not even
entertain these questions stating: “We need not reach the issues presented by Cabazon
Band’s preemption and infringement arguments, nor its arguments regarding the
construction of 18 U.S.C. § 1162, because we hold the annexation void.”73 The Cabazon
continued operation of their gambling establishment; however, their struggle was merely
71
Cabazon, 694 F. 2d 634 at 638.
72
Id. at 638.
73
Id. at 639.
71
beginning as Riverside County and California state authorities would attempt to shut
down what the City of Indio could not.
On February 15, 1983, the Riverside County Sheriff’s Department sent sixteen
officers to raid the tribe’s card club.74 The Sheriff issued citations for violating county
and state ordinances to more than thirty people, including Cabazon officials. The officers
seized cash in the amount of $3,000.00, casino files, playing cards, and casino chips.75
Once again, this action forced the Cabazon to litigate. Rather than facing city authorities,
they now had to contend with county and state representatives. This time around, they
were joined in their struggle by a fellow Riverside County tribe, the Morongo Band of
Mission Indians. The Morongo who were members of the same familial group as the
Cabazon, the Cahuilla, had also attempted to operate a gambling enterprise. Like the
Cabazon, the Morongo operated bingo games for the general population; however, they
did not operate a card club. The tribes united in their stand against local and state
interference and filed a motion for summary judgment and for an issuance of a permanent
injunction barring the state or county from enforcing its gambling laws on reservation
land. The United States District Court for the Central District of California granted these
requests, but the County of Riverside and State of California appealed to the Ninth
Circuit Court of Appeals.
The state formulated its argument in Cabazon Band v. County of Riverside,
decided February 25, 1986, along the same lines that previous state authorities relied on
74
Mason, Indian Gaming, 49.
75
Ibid.
72
in the cases discussed thus far.76 First, California pleaded that state and local laws were
enforceable by Public Law 280. Consequently, in the state’s view, the laws were also
admissible under the Organized Crime Control Act. The third contention brought a fresh
approach to this debate, as the state declared their actions justifiable under “federal
common law.” The Ninth Circuit addressed each of these points in a unanimous opinion
written by Circuit Judge J. Blaine Anderson.
Judge Anderson began by attacking the contention that Public Law 280 granted
jurisdiction to state and local authorities over tribal gaming. Looking to the Ninth
Circuit’s previous decision, Anderson stated that, “we are bound by the precedent
established by this circuit in Barona which is factually and legally indistinguishable from
the case at bar.”77 The decisions rendered by previous courts particularly in Barona and
United States v. Farris had already determined the fact that the distinction between the
civil/regulatory and criminal/prohibitory classification depended on a state’s public
policy. The Barona court determined that tribal bingo halls were consistent with
California’s public policy of allowing charitable or fraternal organizations to operate
bingo games. Following this precedent, Judge Anderson declared, “Therefore, we hold
that the gambling activities of the Tribes on the Indian reservation do not violate
California’s public policy.”78 Further, “Because we have concluded that bingo games are
not contrary to the public policy of California, the activity is not violative (sic) of the
OCCA.”79
76
Cabazon Band v. County of Riverside, 783 F. 2d 900 (9th Cir. 1986).
77
Id. at 902-903.
78
Id. at 903.
79
Id. at 903.
73
While the operation of tribal card clubs is noted in the factual background section
of the opinion, it is not directly mentioned in the core of the court’s decision. In
addressing the applicability of Public Law 280 and the Organized Crime Control Act, the
court did not differentiate between tribal bingo and the card games. It is apparent that
Judge Anderson classified these games under the general heading of “gambling
activities.” Although the court did not state it, the existence of card clubs throughout
California, particularly in the Los Angeles area, demonstrated that they were not
violations of public policy. In fewer than two pages, the court completely dismantled the
state’s first two points.
The state’s case thus depended on their claim that the Supreme Court had
“adopted a federal common law in determining the applicability of state laws on Indian
reservations.”80 “Common law” refers to the use of unwritten law; that lacking a
particular legislative act, the courts could look to past decisions to determine judicial and
congressional intent. The Ninth Circuit concluded that through a “particularized inquiry”
they could examine the interests of state, local, and tribal governments and determine
whether the state’s position held any validity. The “particularized inquiry” was an
examination of case law pertaining to a variety of Native American issues beyond the
scope of this study. What is important from this investigation is the determination that
“state laws may be applied to Indian reservations unless such application would (1)
interfere with reservation self-government, or (2) impair a right granted or reserved by
federal law.”81 The court found that there was no federal law preempting the application
80
Cabazon v. Riverside, 783 F. 2d. at 903
81
Id..
74
of state or local gambling laws upon reservations. Subsequently, federal law was not a
barrier to state jurisdiction. However, this was only one portion of the applicability test
and thus, the court turned to the question of whether state law would infringe upon the
right of reservation self-government. Judge Anderson addressed state, federal, and tribal
interests separately and then ranked the overall strength of each in making a final
determination of jurisdiction. If federal or tribal interests outweighed those of the state,
“then these laws may not be applied on the reservation under the federal common law’s
particularized inquiry test.”82
In Anderson’s opinion, the state’s interest was very weak. Contrary to the
declaration of Judge Choy in United States v. Farris that “Casino operations placed the
tribe in danger of mob takeover whether it realized it or not,”83 Judge Anderson found
that, “There is no evidence whatsoever that organized crime exists on these
reservations.”84 In addition, the laws of California did not make it a crime for nonIndians to participate in the gambling made available by reservation members; they
simply regulated the operation of such activity. The court thus concluded that the state’s
position was meager, especially in comparison to federal and tribal interests.
The Ninth Circuit looked to the presidential policy of Ronald Reagan as a
significant indicator of the federal government’s interest in Indian affairs. In his “Indian
Policy Statement” of January 24, 1983, the President exhibited a fervent desire for tribal
self-determination. President Reagan said that tribes needed to “reduce their dependence
82
Cabazon v. Riverside, 783 F. 2d. at 905.
83
Farris, 624 F. 2d at 895.
84
Cabazon v. Riverside, 783 F. 2d at 904.
75
on federal funds by providing a greater percentage of the cost of their self government.”85
Following this policy, the Department of the Interior declared that tribal bingo operations
were consistent with the President’s desires and were in fact a “revenue-producing
possibility” that should be protected. The Bureau of Indian affairs concurred remarking
that, “tribal bingo enterprises are an appropriate means by which tribes can further their
economic self-sufficiency, the economic development of reservations and tribal selfdetermination.” These declarations made it clear to the court that the federal interest was
strong and only secondary to that of the tribes themselves.
The investment of the Cabazon and Morongo in their own existence and future
was strongest among all parties involved. Not only was gaming the sole source of
income for the tribes, it was also the major source of employment for tribal members.
Gaming provided revenue for the operation of tribal government and allowed for
essential services to tribal members that would otherwise be unattainable. The state
ignored these facts and attempted to convince the court that tribal interests were weak.
California argued that the Cabazon and Morongo were “marketing an exemption” from
state laws to non-Indians. The state claimed that the tribes were simply providing an
activity, designed for profit, which was otherwise illegal for non-Indians to participate in
within California. However, the Ninth Circuit found that this statement was based on an
erroneous interpretation of the Supreme Court ruling in Washington v. Confederated
Tribes of the Colville Reservation. In this case, the Supreme Court found that the state of
Washington’s implementation of an excise and sales tax upon cigarettes sold on
85
Statement by the President: Indian Policy, The White House, January 24, 1983.
76
reservation land was valid.86 The tribe was offering nothing but an exemption from state
taxation that would otherwise be enforced off of the reservation. Washington, however,
was not prohibiting the tribe from selling cigarettes. California was attempting to prevent
the actual activity which provided revenue and employment to tribal members.
The Cabazon and Morongo were not depriving the state of revenues by simply
reselling products whose profits would otherwise be used to provide off-reservation
services. Rather, the tribes were offering an activity that did not deplete state revenue,
but provided the necessary income to relieve some of the burden from non-tribal entities.
Again, the state was refuted in their pleadings. Finally, California took the stance that the
Cabazon or Morongo lacked any tradition of commercialized gaming. While this may
have been true, Judge Anderson explained that it was not the gambling tradition that was
pertinent, but the tradition of self government: “The focus in determining whether a tribal
tradition exists should instead be on whether the tribe is engaged in a traditional
governmental function, not whether it historically engaged in a particular activity.”87
Each of the efforts put forth by the State of California and County of Riverside
came to naught. The Ninth Circuit found federal and tribal interests of providing a means
for self-determination and self-government to greatly outweigh the state’s interest of
preventing organized crime. Therefore, the state could not rely on the federal common
law’s particularized inquiry test. Additionally, precedent had established the gambling
laws of Riverside County and California to be of a civil/regulatory nature rather than
criminal/prohibitory. It is again important to note that the court made no distinction
86
Washington v. Confederated Tribes of the Colville Reservation, 447 U.S. 134, 100 S.Ct. 2069,
65 L. Ed. 2d 10 (1980).
87
Cabazon v. Riverside, F. 2d at 906.
77
between the operation of bingo halls and card clubs. In the court’s opinion, neither
violated state public policy, but rather were both beneficial to tribal self-government:
“We find no basis upon which to distinguish the Tribe’s bingo activities from the Tribe’s
card parlor games. Therefore, our discussion in this case, although specifically
addressing the bingo games, applies with equal force to the card games.”88
Despite the setbacks faced by the Rincon and Puyallup, Native Americans gained
victories through District and Appellate decisions in Oneida, Seminole, Barona, and the
two Cabazon rulings. Casino gaming was becoming a viable source of income and tribal
sovereignty; however, as casino gaming was still in its infancy, so was the battle against
state interference. As gaming expanded and became increasingly profitable, the attention
of outsiders grew stronger. If gaming had failed, state authorities would not have focused
so much attention on the rural tribes. Success brought envy, followed by greed, and the
desire to share in such a profitable enterprise. The state of California and states across
the nation believed that they were being cheated out of a great source of revenue. As a
result, the Cabazon and Morongo would shortly find themselves before the highest court
in the land, and Congress would become involved in the issue of Indian gaming.
88
Cabazon v. Riverside, F. 2d at 906.
78
CHAPTER 3
CABAZON AND THE INDIAN GAMING REGULATORY ACT
Following defeats in Federal District Court and the Ninth Circuit Court of
Appeals, the state of California appealed to the highest court in the nation. On December
9, 1986, the United States Supreme Court began hearing arguments in what would
become the most significant Indian gaming case. Addressing the applicability of state
and local laws on reservation land per Public Law 280 and the Organized Crime Control
Act, the court reviewed case law regarding Indian bingo and similar forms of gambling
on reservations. California argued, as they had in the Cabazon cases, that Public Law
280’s grant of civil jurisdiction included the authority to apply California Penal Code §
326.5 regarding the operation of bingo games. Furthermore, the Organized Crime
Control Act prohibited the type of casinos located on the Cabazon and Morongo
reservations. The Supreme Court disagreed with both assertions.
On February 25, 1987, the court rendered judgment in California v. Cabazon
Band of Mission Indians.1 Justice Byron White delivered the court’s opinion in a 6-3
decision. In determining the extent of Public Law 280 over Indian tribes, White first
referenced the decision in Bryan v. Itasca County.2 The justice declared that in Bryan,
“we recognized that a grant to states of general civil regulatory power over Indian
reservations would result in the destruction of tribal institutions and values.”3 The court
1
California v. Cabazon Band of Mission Indians, 480 U.S. 202 (1987).
2
Bryan v. Itasca County, 426 U.S. 373 (1976).
3
Cabazon, 480 U.S. at 208.
79
clearly did not wish to destroy tribal rights to self-government; however, the issue of
bingo was not as clear-cut as that of taxation on reservation land: “The Minnesota
personal property tax at issue in Bryan was unquestionably civil in matter. The
California bingo statute is not so easily categorized.”4 The court found it necessary to
again examine the civil/regulatory versus criminal/prohibitory dichotomy. Justice White
reviewed the Fifth Circuit’s decision of Seminole Tribe of Florida v. Butterworth5 and the
Ninth Circuit’s opinion in Barona Group of Capitan Grande Band of Mission Indians v.
Duffy.6 In both cases, the respective courts ruled that whether or not a law violated a
state’s public policy determined its classification as criminal or civil. The Supreme Court
was “persuaded that the prohibitory/regulatory distinction is consistent with Bryan’s
construction of Public Law 280.”7 Yet, the distinction was not, in the Supreme Court’s
view, “a bright-line rule.”8 California’s argument that their gambling laws were criminal
and not civil did “hold some weight” with the court; however, a review of California’s
laws and public policy led the Supreme Court to agree with the Ninth Circuit’s findings
in Barona that California’s statute regarding bingo was indeed civil.
The Supreme Court pointed out the fact that California permitted its citizens to
participate in many forms of gambling throughout the state. In addition to charitable
bingo games, the state allowed horse racing and more than four-hundred card clubs.
These were facts that the state did not dispute. Most notably, California adopted a lottery
4
Cabazon, 480 U.S. at 208.
Seminole Tribe of Florida v. Butterworth, 658 F. 2d 310 (5th Cir. 1981).
5
6
Barona Group of Capitan Grande Band v. Duffy, 694 F. 2d 1185 (9th Cir. 1982).
7
Cabazon, 480 U.S. at 210.
8
Id.
80
in 1984, in which the state “daily encourages its citizens to participate in this state-run
gambling.”9 In regards to bingo, the state did not prohibit how many games an individual
could play, or how much money one could spend; the state only limited the value of
prizes. Further, the state exhibited “no effort to forbid the playing of bingo by any
member of the public over the age of eighteen.”10 As with previous courts, the Supreme
Court saw no justification of the state’s contention that Indian gaming enterprises were
violations of state public policy, when the state itself permitted and even promoted
gambling on a daily basis:
In light of the fact that California permits a substantial amount of gambling
activity, including bingo, and actually promotes gambling through its state lottery,
we must conclude that California regulates rather than prohibits gambling in
general and bingo in particular.11
California argued that, although it allowed limited forms of gambling, operation
of a large “unregulated bingo” game, that might attract organized crime, was classified as
a misdemeanor under state law. In response, the Supreme Court reiterated the Seminole
v. Butterworth opinion: because a regulatory law is “enforceable by criminal as well as
civil means does not necessarily convert it into a criminal law within the meaning of
Public Law 280.”12 The court held that if it allowed California and other states to expand
the definition of civil jurisdiction under Public Law 280, the federal goal of tribal selfgovernment and self-initiative would be compromised and “total assimilation
9
Cabazon, 480 U.S. at 210-211.
10
Id. at 211.
11
Id.
12
Id.
81
permitted.”13 Justice White declared that California could not assume such authority
under Public Law 280, and turned his attention to the Organized Crime Control Act.
The Barona court ruled that “whether a tribal activity is ‘a violation of the law of
a state’ within the meaning of OCCA depends on whether it violates the ‘public policy’
of the State.”14 While the Supreme Court found that the Cabazon and Morongo casinos
were not in violation of the Organized Crime Control Act, they disagreed with the public
policy test implemented in Barona. Rather, Justice White cited the Sixth Circuit Court of
Appeals decision of United States v. Dakota.15 This ruling declared the enforcement of
OCCA to be solely “an exercise of federal rather than state authority.” States had no
right to close Indian casinos based upon the premise that they were violating federal laws.
White stated, “There is nothing in OCCA indicating that the States are to have any part in
enforcing federal criminal laws or are authorized to make arrests on Indian reservations
that in the absence of OCCA they could not affect.”16 Regardless of whether the
Cabazon and Morongo gambling establishments violated state public policy, the state
could not use OCCA to shut them down; this power could only be exercised by the
federal government.
The Supreme Court ruled against California using Public Law 280 and the
Organized Crime Control Act. Yet, the court did not simply affirm the judgment in favor
of tribal governments as the tribes had desired. Quoting the case of New Mexico v.
Mescalero Apache Tribe, the court stated that, “Under certain circumstances a State may
13
Cabazon, 480 U.S. at 211.
14
Id. at 213.
15
United States v. Dakota, 796 F. 2d 186 (1986).
16
Cabazon, 480 U.S. at 213-214.
82
validly assert authority over the activities of nonmembers on a reservation, and… in
exceptional circumstances a State may assert jurisdiction over the on-reservation
activities of tribal members.”17 An example of such an instance was seen in Washington
v. Confederated Tribes of Colville Indian Reservation, discussed in the previous
chapter.18 Recall that the court found in this case that the tribe was simply “marketing an
exemption” from state sales tax on cigarettes. They were not offering anything but a
discount on tobacco that non-Indians could not get elsewhere. In Cabazon, the court
found it necessary to determine whether or not the Cabazon and Morongo were
marketing an exemption from state laws, and whether the federal government pre-empted
state attempts to assume jurisdiction.
Justice White concluded that the Cabazon and Morongo were not marketing an
exemption from state laws. Further, he noted that the federal government’s interest in
tribal self-government pre-empted any state attempt to assume jurisdiction. Unlike the
situation in Washington v. Confederated Tribes, people visiting the Cabazon and
Morongo reservations were not simply purchasing a discounted item and then leaving.
The court compared the casinos to the Mescalero Apache’s hunting and fishing resort
operated in New Mexico. In the case of New Mexico v. Mescalero Apache Tribe, the
court had stated that a state could intervene in tribal matters on rare occasions; however,
the operation of a resort complex was not one of those instances.19 In the court’s opinion,
the Mescalero Apache were not marketing an exemption from state hunting and fishing
17
New Mexico v. Mescalero Apache Tribe, 462 U.S. 324 (1983) at 331-332.
18
Washington v. Confederated Tribes of Colville Indian Reservation, 447 U.S. 134 (1980).
19
New Mexico, 462 U.S. at 324.
83
regulations. Therefore, the state was prohibited from regulating these on-reservation
activities. The tribe’s desire to procure funds to benefit tribal members pre-empted New
Mexico’s desire to regulate hunting and fishing. The Cabazon and Morongo held similar
interests in the operation of their casinos. Neither reservation contained any type of
exploitable natural resource. Therefore, casinos became a necessity for tribal survival.
Only through well-run, modern facilities could the tribes gain the necessary funds to
promote the well-being of their members. Additionally, the federal government
recognized that tribal bingo operations were vital to the existence of many tribes. The
Indian Financing Act of 1974, the Department of Housing and Urban Development, and
the Department of Health and Human Services had all “provided financial assistance to
develop tribal gaming enterprises.”20 The federal government hoped that, through the
development of tribal bingo, tribes could not only help themselves, but relieve some of
the financial burden from the United States. In the court’s view, federal interests clearly
outweighed those of the state.
California’s final claim to state jurisdiction relied on the case of Rice v. Rehner.
In that case, the Supreme Court held that, if a tribal business sold alcohol for offreservation consumption, California could require the business’ owner to obtain a state
liquor license.21 The court distinguished Cabazon from Rice, observing that:
Congress had never recognized any sovereign tribal interest in regulating liquor
traffic and that Congress, historically, had plainly anticipated that the States
would exercise concurrent authority to regulate the use and distribution of liquor
on Indian reservations.22
20
Cabazon, 480 U.S. at 217-218.
21
Rice v. Rehner, 463 U.S. 713 (1983).
22
Cabazon, 480 U.S. at 220.
84
Unlike alcohol, a traditional federal view regarding gambling did not exist. This did not
mean that a federal view opposing gambling could not be created. Justice White
explained that, “surely the Federal government has the authority to forbid Indian
gambling enterprises.”23 Congress had not expressed such a position, and in White’s
opinion, “the federal policy is to promote precisely what California seeks to prevent.”24
Therefore, the court affirmed the Ninth Circuit’s decision declaring that, “State regulation
would impermissibly infringe on tribal government, and this conclusion applies equally
to the county’s attempted regulation of the Cabazon’s card club.”25 The decision,
however, was not unanimous.
It is important to review the dissenting opinion in Cabazon in order to gain
perspective into the thought pattern of those opposing Indian gaming. Justice John P.
Stevens wrote the dissenting opinion joined by Justices Sandra Day O’Connor and
Antonin Scalia. Stevens argued that, absent Congressional exemption, Indian gaming
should be subject to state law. Although gaming provided “needed employment and
income” for many tribes, Stevens feared the repercussions of permitting casinos:
“Accepting the majority’s reasoning would require exemptions for cockfighting, tattoo
parlors, nude dancing, houses of prostitution, and other illegal but profitable
businesses.”26 Stevens also disagreed with the majority’s belief that gambling was
consistent with California public policy stating:
23
Cabazon, 480 U.S. at 221.
24
Id. at 220.
25
Id. at 222.
26
Id. at 222.
85
To argue that the tribal bingo games comply with the public policy of California
because the State permits some other gambling is tantamount to arguing that
driving over 60 miles an hour is consistent with public policy because the State
allows driving at speeds of up to 55 miles an hour.
Justice Stevens appeared to have a moral objection to gambling reminiscent of that of
Judge Choy in United States v. Faris. Stevens’ comparisons exhibited a still widely held
Protestant Christian belief in America that classified certain “vice” activities as immoral.
This can be seen in his comparison of gambling to cockfighting and prostitution. In a
footnoted response to the dissenting opinion, Justice White stated, “Nothing in this
opinion suggests that cockfighting, tattoo parlors, nude dancing, and prostitution are
permissible on Indian reservations within California.”27 Indian gaming advocates further
saw no comparison between casino gaming, which they advocated for improving tribal
life, with driving five miles over the legal speed limit.
In declaring the minority’s view that the Cabazon were marketing an exemption
from state laws, Justice Stevens highlighted the fact that the tribe only had twenty-five
members, an amount “barely adequate to operate a bingo game that is patronized by
hundreds of non-Indians nightly.”28 Stevens added, “How this small and formerly
impoverished Band of Indians could have attracted the investment capital for its
enterprise without benefit of the claimed exemption is certainly a mystery to me.”29
Indian gaming advocates might have asked themselves how the number of Indians
belonging to any particular tribe had any bearing upon their right to operate a casino?
The fact that the tribe was “small and impoverished” is the entire reason why they needed
27
Cabazon, 480 U.S. at 211.
28
Id. at 226.
29
Id. at 226.
86
to open and operate a casino. It also confirmed the federal government’s position that
Indian gaming was an important means of bringing tribes out of poverty.
Stevens further declared that the Cabazon and Morongo casinos “drain funds from
the state-approved recipients of lottery revenues.”30 Justice White responded to this
statement as “strange,” stating, “It is pure speculation that, in the absence of tribal bingo
games, would-be patrons would purchase lottery tickets or would attend state-approved
bingo games instead.”31 There are many individuals who prefer playing cards or bingo,
who will not even think of playing the lottery. Similarly, there are people who will
occasionally play the lottery, but will not think to go into a casino to play cards or bingo.
Justice Stevens’ provided no factual basis to his contention that Indian gaming affects
state lottery revenue. 32 Finally, in addressing the issue of organized crime, which the
minority felt was a threat to Indian casinos, Stevens wrote, “Indeed, California regulates
charitable bingo, horseracing, and its own lottery.”33 Stevens’ own words clearly deem
California gambling laws to be regulatory and not prohibitory, yet the justice did not see
this fact. Fortunately, for Indian tribes, these sentiments were part of the minority and
not the majority opinion. The minority felt that Congress and not the court should be
determining the legality of Indian gaming. They would soon get their wish.
Despite support from three justices, California again failed to assume state
jurisdiction over Indian gaming. The state could not convince the court’s majority that
30
Cabazon, 480 U.S. at 226.
31
Id. at 222.
32
Further explanation of this assertion will be discussed in Chapter 6 in a comparison between
revenues of California Indian Casinos and the California Lottery from 1999 to 2008. See Chapter 6 and
Appendices D & E.
33
Cabazon, 480 U.S. at 227.
87
Public Law 280 granted full civil authority; and their own promotion of a state lottery
proved that gambling was not against state public policy. Even if California had shown
proof of organized crime infiltration in Indian casinos, which it did not, the court
prevented the state from applying the Organized Crime Control Act, as it was purely a
federal law. The court recognized tribal and federal interests in maintaining casinos as a
means of promoting tribal well-being. The Cabazon decision presented tribes across the
nation an opportunity; however, the issue was not yet resolved. As the court heard
California v. Cabazon, Congress took initial steps towards federal intervention.
Following the court’s decision, Congress became directly involved in Indian gaming.
Congress began hearings regarding Indian gaming in 1985. At the time, the
Department of the Interior estimated that close to eighty tribes were operating gaming
facilities, primarily providing bingo. Of those tribes, twenty to twenty-five operated high
stakes bingo, with some groups profiting nearly one-million dollars per month.34
Politicians from both sides of the political spectrum felt the need for specific legislation
regarding Indian gaming. Senator John McCain (R. Arizona) strongly supported tribal
rights to sovereignty and self-determination and Senator Tom Daschle (D. South Dakota)
believed that Indian gaming was instrumental in bringing tribal members out of
poverty.35 Representative Mark Udall (D. Colorado) introduced HR 1920 in the House of
Representatives on April 2, 1985. The proposed bill, entitled the Indian Gaming Control
34
Sioux Harvey, “Winning the Sovereignty Jackpot,” in Indian Gaming Who Wins? eds. Angela
Mullis and David Kamper (Los Angeles: Regents of the University of California, 2000), 14-34.
35
Harvey, “Winning the Sovereignty Jackpot,” 18-24.
88
Act, sought to establish “federal standards for gaming activity on Indian lands.”36 The
act passed the House on April 21, 1986, in which the Senate then referred it to the
Committee on Indian Affairs. In the Senate, Daniel K. Inouye (D. Hawaii) and Daniel J.
Evans (R. Washington) took the lead in supporting what Udall had begun.37 Following
the Cabazon decision, Congress needed to act as soon as possible in order to establish
some type of federal guidelines regarding Indian gaming before casino expansion grew
out of control. On October 17, 1988, Congress passed Public Law 100-497, entitled the
Indian Gaming Regulatory Act (IGRA).38
The purpose of the Indian Gaming Regulatory Act was to “provide a statutory
basis for the operation of gaming by Indian tribes as a means of promoting tribal
economic development, self-sufficiency, and strong tribal governments.”39 Further, the
act intended to prevent organized crime and “to assure that gaming is conducted fairly
and honestly by both the operator and players.”40 To achieve these goals, the act created
a committee to oversee and enforce federal regulations regarding Indian gaming. Under
the supervision of the Department of the Interior, the National Indian Gaming
Commission is comprised of three individuals. The President, with Senate approval,
appoints a chairman for a maximum of three years. The Secretary of the Interior then
selects two associate members, one who serves for three years, and the other who serves
36
US House of Representatives Committee on Interior and Insular Affairs, Indian Gambling
Control Act, 99th Congress, 1st sess., 14 November 1985 (Washington, DC: Government Printing Office,
1987), 37.
37
Harvey, “Winning the Sovereignty Jackpot,” 17.
38
Pub. L. 100-497, Sec. 2, Oct. 17, 1988, 102 Stat. 2467.
39
25 U.S.C. §2702.1.
40
25 U.S.C. §2702.2.
89
for one year. The three members vote to determine who will become the vice chairman.
IGRA provides that members of the commission must come from both political parties, at
least two must be enrolled members of an Indian tribe, and no member can have a
criminal background or have financial interest in any gaming operation. The commission
must meet at least once every four months, and at least two members must be present to
constitute a quorum. It is responsible for oversight and enforcement of IGRA, and must
submit a written report to Congress every two years.41
IGRA’s specific provisions begin with the separation of types of gaming into
three distinct classifications. Class I gaming is defined as “social games solely for prizes
of minimal value or traditional forms of Indian gaming engaged in by individuals as a
part of, or in connection with, tribal ceremonies or celebrations.”42 These games are
played purely for traditional cultural purposes, they do not involve casino style gaming.
Class II gaming is specifically defined as bingo, or card games that “are explicitly
authorized by state laws or are not explicitly prohibited by the laws of the State.” Tribes
can offer games for monetary prizes of any size in bingo, but must conform to state laws
regarding regulation of wagers or pot sizes in card games. Class II gaming however,
does not refer to all card games. Class II does not include, “any banking card games,
including baccarat, chemin de fer, or blackjack (21).”43 Class II gaming also does not
include “electronic or electromechanical facsimiles of any game of chance or slot
machines of any kind.”44 The last classification of gaming, Class III, is defined as “all
41
25 U.S.C. §2704.
42
25 U.S.C. §2703.6.
43
25 U.S.C. §2703.7.
44
25 U.S.C. §2703.7.
90
forms of gaming that are not Class I gaming or Class II gaming.”45 This terminology is
very broad, and would lead to future debates regarding classification of specific games.
In addition to classification as I, II, or III, casino games can be grouped into three
categories: house banked, percentage, or non-house banked/non-percentage. California
penal code §330 prohibits playing of any house banked or percentage game. The
California Court of Appeals defined “house banked” as a game in which the house “is a
participant in the game, taking on all comers, paying all winners, and collecting from all
losers.”46 For example, in blackjack, if a player wagers $10.00 and wins, the casino pays
$10.00 from its own money. Conversely, in games such as poker, players play against
each other and the casino simply takes a percentage of the pot, called a “rake,” as a fee
for playing. The casino does not have a direct interest in the outcome of the game, but
makes its money based on how much is wagered. This is an example of a percentage
game, defined as “encompassing any game of chance from which the house collects
money calculated as a portion of wagers made or sums won in play, exclusive of charges
or fees for use of space and facilities.”47
In California card clubs, the rules of games or methods of collecting fees from
patrons are formatted in a way that avoids classification as a house banked or percentage
game. In poker, rather than taking a percentage of the pot, casinos take the same sum of
money from all games at a particular table regardless of the amount wagered. This is
45
25 U.S.C. §2703.8.
46
Sullivan v. Fox, 189 Cal. App. 3d 673 (1987).
47
Id.at 679.
91
referred to as a “collection” and falls under the legal term of a “facility fee.”48 Rather
than charging a percentage of wagers made or won, the casino charges a flat fee based
upon hours played, or simple use of their facility. It is equivalent to renting the table,
dealer, chips, and entire atmosphere of the casino. In this manner, the casino has no
interest in the outcome of any game. Another example of the casino modifying rules and
acting in a passive role is seen in the manipulation of the rules of blackjack. § 330
specifically prohibits “blackjack or 21.” To avoid this prohibition, casinos play to 22
rather than 21 and rename the game to titles such as “California 22.” Each player must
pay a nominal fee, usually fifty cents, for each hand played. A player at the table acts as
the bank, paying all winnings from his or her own money and collecting all losses from
other players. The position of banker, however, must rotate amongst players. Otherwise,
a player with a large sum of money can dominate play and change the classification from
non-banked/non-percentage to a house banked game.
The individual classification of a gaming activity as I, II, or III determines which
authority maintains jurisdiction over it. Class I gaming is solely left to tribal
governments. It is not subject to any of the provisions within IGRA. Tribal governments
also maintain jurisdiction over Class II games, but the National Indian Gaming
Commission (NIGC) has oversight and regulatory authority. A tribe may participate in
Class II gaming if their casino is “located within a State that permits such gaming for any
purpose by any person, organization or entity and such gaming is not otherwise
specifically prohibited on Indian lands by Federal law.”49 The tribal government must
48
Oliver v. County of Los Angeles, 66 Cal. App. 4th 1397 (1998).
49
25 U.S.C. §2710.
92
adopt an ordinance or resolution regarding the desired gaming and the chairman of the
NIGC must approve this ordinance. The chairman will approve only if the tribe shows it
“will have the sole proprietary interest and responsibility for the conduct of any gaming
activity.” Further, net revenues from gaming must be used to: (1) fund tribal government
operations or programs; (2) provide for the general welfare of the Indian tribe and its
members; (3) promote tribal economic development; (4) donate to charitable
organizations; (5) help fund operations of local government agencies.50 Tribes
participating in Class II gaming must provide the NIGC with outside audits of their
gaming operations.
IGRA clearly states its goal as development of entire tribal groups, not individual
wealth. If tribes choose to make per capita payments to tribal members, the tribe must
first prove that each of the above goals have been met, including protecting the interests
of minors and those who can not care for themselves. These payments are subject to
federal taxation.51 IGRA provides an exemption for individually owned Class II facilities
in operation before September 1, 1986. These casinos, however, must give at least 60
percent of all revenues to the local Indian tribe. Congress rejected closing successful
operations; and the federal government wanted to ensure that the largest proportion of
funds went to the betterment of entire tribes.52
In addition to approving or denying ordinances regarding Class II gaming, the
NIGC has the authority to issue orders of closure or impose civil fines for casinos that
50
25 U.S.C. §2710.
51
25 U.S.C. §2710.
52
25 U.S.C. §2710.
93
violate IGRA. The commission also performs background checks on all key casino
employees before issuing gaming licenses. Commission officers inspect and examine all
Class II facilities, and can demand access to any documents pertaining to casino
revenues. The commission collects fees from each Class II operation, and sets the
percentage of fees to be paid annually. The fees cannot exceed more than 2.5 percent of
the first $1.5 million in gross revenues for any single operation, and no more than 5
percent of revenue in excess of that amount. In total, all fees collected from every
operation cannot total more than $8 million.53
If a tribe has demonstrated the ability to operate a fiscally and economically
sound Class II casino for more than three years, including proper accounting, licensing,
and monitoring procedures, it may apply for a certificate of self-regulation. Tribes may
also enter into management contracts with outside corporations to operate their casinos.
These are two important aspects of tribal sovereignty; however, the NIGC still maintains
the final authority over these provisions. The commission, after holding a hearing with
tribal leaders, may revoke a certificate of self-regulation if it feels that just cause warrants
such action.54 Tribes may contract with outside corporations for management of either
Class II or Class III facilities. Management contracts must go to the commission for
approval and are limited to five years, during which an outside corporation can only take
a maximum of 30 percent of the casino’s net revenues. In rare cases, the NIGC may
approve a contract of seven years and up to 40 percent of revenues, but the majority of
53
25 U.S.C. §2717.
54
25 U.S.C. §2710.
94
contracts are limited to the five year/30 percent restriction.55 At the end of the contract’s
term, the tribe can choose to self-manage the casino, or if they employ outside
management, the corporation must turn full control over all activities to the tribal
government.56
Class III gaming operations have the most money making potential; therefore,
they are important not only to the tribes, but also to the associated states. To appease
state officials, who feared losing all say in Indian gaming, Congress significantly changed
the regulation of Class III gaming. Like Class II gaming, an Indian tribe must approve
and adopt an ordinance or resolution regarding gaming which states that gaming can only
be “located in a State that permits such gaming activity for any purpose by any person,
organization, or entity.” Unlike Class II gaming, Class III must be “conducted in
conformance with a Tribal-State compact entered into by the Indian tribe and the state.”57
These compacts are binding, and all gaming activity is fully subject to their terms and
conditions. Unlike Class II operations, tribes now found that they had to negotiate with
states in order to open Class III casinos. The federal government was not removed from
the process as tribal-state compacts must be approved by the Secretary of the Interior, and
IGRA established specific procedures for entering into negotiations. This created the
means for preventing states from simply not negotiating.
To enter into a tribal-state compact, an Indian tribe informs the state, in writing,
of its intentions to negotiate. IGRA requires the state to act in “good faith” and enter into
55
25 U.S.C. §2711.
56
Joseph G Jorgensen, “Gaming and Recent American Indian Economic Development,” in Indian
Gaming Who Wins?, 97.
57
25 U.S.C. §2710.
95
negotiations with the tribe. Compacts may include provisions regarding: (1)the
application of state and tribal civil or criminal laws to gaming; (2) assessments by the
state of gaming activities in amounts as are necessary to defray the costs of regulating
such activity (e.g. fees or revenue sharing); (3) taxation by the Indian tribe of such
activity in amounts comparable to amounts assessed by the State for comparable
activities (e.g. if an individual hits a jackpot, he or she must pay state or federal taxes);
(4) remedies for breach of contract; (5) standards for the operation of such activity and
maintenance of the gaming facility including licensing; (6) any other subjects that are
directly related to the operation of gaming activities. In exchange for entering into a
tribal-state compact, the federal government waives Title 15 § 1175 of the United States
Code. This section, known as the Johnson Act, made possession, transportation,
manufacturing, or selling of any gambling device, unlawful on Indian lands.58 Without
this exemption all slot machines would be illegal.
Key to negotiations is the fact that states cannot refuse to negotiate simply
because they want to tax Indian gaming. Section 2710.4 of IGRA clearly states:
Except for any assessments that may be agreed to under paragraph (3) (c) (iii) of
this subsection, nothing in this section shall be interpreted as conferring upon a
State or any of its political subdivisions authority to impose any tax, fee, charge,
or other assessment upon an Indian tribe or upon any other person or entity
authorized by an Indian tribe to engage in a Class III activity. No State may
refuse to enter into the negotiations described in paragraph (3) (a) based upon the
lack of authority in such State, or its political subdivisions, to impose such a tax,
fee, charge, or other assessment.59
While state officials may not like this aspect of IGRA, it is an important provision in
protecting tribal rights to request negotiations.
58
15 U.S.C. §1175.
59
25 U.S.C. §2710.4.
96
Further protections to tribal interests are the remedies that IGRA provides to
tribes if a state refuses to negotiate and acts in “bad faith.” If a state fails to respond
within one-hundred and eighty days of a tribe’s request to negotiate, the tribal
government may initiate a cause of action in the United States District Court. The burden
of proof in showing that the state has indeed acted in good faith is placed upon the state.
If the court finds that the state did not act in good faith, the court orders the state to
complete a compact within sixty days. The court takes into account any state concerns
regarding public interest, safety, criminality, financial integrity, or adverse economic
impacts on existing gaming activities. If a compact is still not reached, both the tribal
government and state must submit a final proposal to a court appointed mediator. The
mediator is responsible for choosing the compact that best meets federal goals and
complies with federal laws. If the state refuses to accept the mediator’s decision, a tribe
may enter into a compact directly with the Secretary of the Interior. If the Secretary of
the Interior fails to act within forty-five days, the compact is defaulted into legal
acceptance and becomes binding.60
IGRA established a statutory foundation for Indian gaming. Tribal governments
gained the ability to regulate Class I gaming with no outside interference, and Class II
gaming with minimal federal interference. This was a great victory for tribal sovereignty
and self-determination; however, the provisions of Class III gaming left tribes with the
monumental task of negotiating with state governments. Although IGRA required state
governments to act in good faith, the tribal-state compact process was anything but easy.
In California especially, tribes struggled to gain compacts that would be beneficial to
their people, as state officials returned to the old dispute over jurisdiction and the new
60
25 U.S.C. §2710.7.
97
debate of which classification particular games fell under. Again, tribal and state leaders
landed in court and the Supreme Court would soon deal a blow to tribal sovereignty by
negating the IGRA protections that forced states to act in good faith.
98
CHAPTER 4
THE COURTS CONTEMPLATE IGRA
The Indian Gaming Regulatory Act provided a statutory framework for Indian
tribes desiring to operate Class II and Class III casinos. Tribal leaders across the nation
viewed IGRA as an opportunity to open new casinos, or to secure legal status for casinos
already in operation. States, however, were not as eager to rush into the process of
negotiating over Class III gaming. Tribal and state leaders held conflicting views as to
what IGRA required of the other. Arguments arose over when a state was required to
enter into negotiations, and whether a state could be taken to court if it refused to
negotiate as IGRA specified. The court decisions of the 1990s were a mixture of
setbacks and successes for tribal leaders. Differing courts held conflicting views over
congressional intent and implementation of IGRA. Court rulings, both within and out of
California, directly affected tribal attempts to gain compacts for the legal operation of
Indian casinos on California’s reservations.
The first significant post-IGRA court decision occurred in Connecticut, not
California. The Mashantucket Pequot Tribe requested that Connecticut enter into
negotiations for a tribal-state compact for Class III gaming. When the state did not
comply within the one-hundred and eighty day required by IGRA, the tribe sued in
district court. The court ordered the state to complete a compact within sixty days per §
2710 (d) (7) (B) (iv) of IGRA. The state appealed to the Second Circuit Court of Appeals
contending it did not have to enter into negotiations because tribal leaders wished to
negotiate over games that were illegal within the state. The state also argued that the
99
tribe failed to pass a tribal ordinance before requesting negotiations, thus violating an
IGRA requirement. Tribal leaders countered, declaring that the state allowed charitable
organizations to participate in “Las Vegas Nights” that offered Class III games. They
also stated that the only precondition to negotiations was a simple request to negotiate,
regardless of whether or not a tribal ordinance was already in place.1
The Second Circuit decided Mashantucket Pequot Tribe v. State of Connecticut
on September 4, 1990. The court disagreed with the state’s contention that a tribal
ordinance was a prerequisite to negotiation stating, “Nothing in that provision requires
sequential satisfaction of its requirements, nor does its legislative history suggest that a
tribal ordinance must be in place before a state’s obligation to negotiate arises.”2 In the
court’s view, IGRA’s specification that gaming would be subject to the terms and
conditions of a tribal-state compact indicated Congress’ intent that negotiations occur
before the adoption of a tribal ordinance: “Obviously, if a state does not permit ‘such
gaming,’ the matter is at an end, and the adoption of a tribal ordinance will never occur.”3
The court further noted that the “such gaming” requirement of § 2710 referred to the
class of gaming to be negotiated, not a specific individual game.
The court used the Senate Report accompanying IGRA to illustrate the proper
manner to determine whether a class of gaming is allowed; this was to use the “Cabazon
rationale” of whether or not an activity was a violation of public policy and thus
civil/regulatory or criminal/prohibitory.4 Although the report was specific to Class II
1
Mashantucket Pequot Tribe v. State of Conn., 913 F. 2d 1024 (2nd Cir. 1990) at 1027.
2
Id. at 1028.
3
Id. at 1028-29.
4
Senate Report at 6, U.S. Code Cong. & Admin. News 1998, 3076.
100
gaming, the court found that the same principle applied to Class III. The state’s
allowance of “Las Vegas Nights” exemplified the fact that Class III gaming was not
against Connecticut’s public policy. If the court agreed with the state, then compacts
would only be reached through the “acceptance of, the entire state corpus of laws and
regulations governing such gaming.”5 In the court’s view, this made the compacting
process, the key element of IGRA, a “dead letter.”6 If the state had no reason or incentive
to negotiate, then it would not. IGRA, however, gave states the opportunity to play a
vital role in the regulation of Indian casinos within their borders. The court did not
declare that a state must accept every demand of tribal leaders, but that it must at least
negotiate in good faith:
This ruling means only that a State must negotiate with the Tribe concerning the
conduct of casino-type games of chance at the Reservation. We necessarily leave
to those negotiations the determination of whether and to what extent the
regulatory framework under which such games of chance are currently permitted
in the State shall apply on the Reservation.7
The court declared that Connecticut did not meet the requirement of negotiating in good
faith, and thus, affirmed the district court judgment ordering the state to negotiate a
compact within sixty days.
Three years after the Second Circuit’s decision, the Eighth Circuit Court of
Appeals addressed a similar issue of a state refusing to negotiate in good faith. The
Eighth Circuit decided Cheyenne River Sioux Tribe v. State of South Dakota on August
5
Mashantucket, 913 F. 2d at 1031.
6
Id. at 1031-32.
7
Id.
101
23, 1993.8 The State of South Dakota refused to negotiate with the Cheyenne River
Sioux over the topic of keno. The state permitted the playing of various forms of Class
III games in the historic town of Deadwood including slot machines, blackjack, and video
keno. The state set limitations on the number of games that each casino could maintain
and set a maximum wager limit of $5.00.9 South Dakota successfully negotiated tribalstate compacts with six of the nine tribes located within their borders. The first of these
compacts, with the Flandreau Santee Tribe, became a model for all future compacts. If a
tribe wanted a compact with more favorable terms, the state demanded concessions such
as expanded criminal jurisdiction.10
Tribal leaders pointed to the differences between the Cheyenne River reservation
and the Flandreau reservation. The Cheyenne River reservation was nearly the size of the
state of Connecticut, contained ten times as many tribal members, but was not located
near a population center. Therefore, the tribe believed it was necessary to make their
casino more attractive to customers. Facilitating this goal included placing a casino on
trust land located near areas of greater population such as the town of Pluma or the state
capitol of Pierre, and offering expanded gaming with higher bet limits, such as keno. To
bolster its case, the state argued that the video keno permitted was different from
traditional keno, state law fixed bet limits, and a casino could only be located within the
tribe’s reservation. South Dakota also argued that the tribe’s lawsuit should be dismissed
8
Cheyenne River Sioux Tribe v. State of S.D., 3F. 3d 273 (8th Cir. 1993).
9
Id. at 279-280.
10
Id. at 277.
102
based on protections guaranteed under the Tenth and Eleventh Amendments of the
constitution.11
In a completely opposite manner than that of Mashantucket Pequot Tribe, the
Eighth Circuit held that the state “need not negotiate traditional keno if only video keno
is permitted in South Dakota.”12 The court based this contention upon the belief that
“The ‘such gaming’ language of 25 USC § 2710 does not require the state to negotiate
with respect to forms of gaming it does not presently permit.”13 Rather than interpreting
“such gaming” to mean the general classification of a game, the court declared that a state
could refuse to negotiate on a game per game basis. This negated the Second Circuit’s
purpose of simply attempting to get both sides to negotiate and then decide which games
to permit. Under the Eighth Circuit’s interpretation, a state could simply say “no” before
even discussing a particular game. The ruling created a further problem in that two
equally authoritative courts reached opposing decisions on a similar situation. This
created the potential of conflicting precedents for future cases. The court also prevented
the Cheyenne River Sioux Tribe from discussing higher wager limits stating that they
were established as a matter of state law.14
Not all aspects of the court’s opinion were detrimental to the tribe or to Indian
gaming advocates across the nation. The court declared that neither the Tenth nor
Eleventh Amendments bared the suit against the state. While the Tenth Amendment
grants states powers that are not specifically delegated to the federal government, the
11
Cheyenne River, 3F. 3d. at 278.
12
Id. at 279.
13
Id. at 280.
14
Id.
103
court found that, because a state ultimately can never be forced into agreeing to a
compact, those powers were not violated. Under § 2710 of IGRA, if a state refuses to
negotiate or to agree to a mediator’s proposed compact, the tribe can deal directly with
the Secretary of the Interior.15 The court further found that the state could not claim
sovereign immunity under the Eleventh Amendment. In the court’s opinion, Congress
clearly intended to abrogate a state’s immunity to suit through IGRA, and in this case, the
state had willingly negotiated with other tribes: “In addition, the state actively engaged in
negotiating tribal-state compacts and has reaped the benefits from these negotiations…”16
Of great significance to both the Cheyenne River Sioux and many other rural tribes
throughout the country was the court’s statement that, “We disagree with the state’s
contention that land must be located within an Indian reservation to be considered Indian
lands under the IGRA.”17 This statement granted economic opportunity to tribes that
would be unable to gain from Indian gaming based merely on their geographical location.
Following the decisions concerning Connecticut and South Dakota tribes,
California tribes were involved in several significant court cases. The first of these
matters did not directly involve the state of California, but rather a dispute between the
Cabazon and the National Indian Gaming Commission. Cabazon Indians v. National
Indian Gaming Commission, decided January 28, 1994, concerned the classification of a
particular game as Class II or Class III.18 Seven other tribes joined the Cabazon in
arguing that the NIGC had improperly designated their electronic pulltab machines as a
15
25 U.S.C. at § 2710.
16
Cheyenne River, 3F. 3d at 281.
17
Id. at 280.
18
Cabazon Indians v. Natl. Indian Gaming Com’n, 14 F. 3d 633 (D.C. Cir. 1994).
104
Class III game. In this game, players simultaneously played against each other in groups
of machines called “pods.” The computer contained a set number of winners and
revealed the ticket to the player, in which the player then instructed the computer to
reveal whether the pulltab was a winner or loser. The tribes argued that this was simply
an electronic aid of a game that the NIGC had already designated as Class II.19
The court sided with the NIGC in declaring that the electronic pulltab machine
was a Class III game. In spite of the fact that players were not directly playing against
the house, the game was not viewed as an electronic aid. Section 2703 of IGRA states
that Class II gaming “does not include electronic or electromechanical facsimiles of any
game of chance.”20 Unlike electronic equipment used to simulcast bingo games to more
than one location, the pulltab machines were not simply aiding in the play, but were an
exact copy of a game of chance in electronic form. This opinion lead to further
controversy as some tribes continued to operate the games despite the court’s ruling.
In San Diego County, sheriff’s officers raided the Barona, Sycuan, and Viejas
tribal casinos. Reminiscent of the days before the Cabazon decision, the officers seized
the respective tribe’s pulltab machines, cash, and records. In response, the tribes sued
San Diego County Sheriff Jim Roache in district court. The district court granted the
bands declaratory and injunctive relief stating that “county officials were precluded by
IGRA from jurisdiction to execute the warrants and prosecute the tribal gaming
19
Cabazon Indians v. Natl. Indian Gaming Com’n, 14 F. 3d at 635.
20
25 U.S.C. at § 2703 (7) (B) (ii).
105
officials.”21 The county appealed the decision, in which the Ninth Circuit Court of
Appeals decided Sycuan Band of Mission Indians v. Roache on September 26, 1994.
Circuit Judge William Canby wrote an opinion that, like Cheyenne River Sioux,
contained some positive and negative components for Indian gaming advocates. The
court upheld the district court’s ruling in all aspects, including granting declaratory and
injunctive relief to the tribes, but also preventing the tribes from reclaiming the pulltab
machines. The court reiterated that pulltabs were electronic facsimiles and thus Class III
games, regardless of whether or not the players played against each other or against the
house. Because there was no tribal-state compact, the court denied the motion to return
the machines directly to the tribes. Instead, the court ordered the games returned to
Video Autotab, Inc the lessor of the machines.22
County officials, however, lacked jurisdiction to raid the tribal casinos. The
federal government maintained authority to enforce state laws regarding gambling on
Indian reservations despite the state’s futile attempt to again claim Public Law 280
jurisdiction: “Whether IGRA has made broader inroads on Public Law 280 we need not
decide; it has clearly made criminal enforcement of the State’s laws prohibiting ‘slot
machines’ the exclusive province of the federal government.”23 The court also found that
the state could not attempt to regulate Class II gaming on a game by game basis:
We express no opinion concerning Class III, but at least insofar as the State’s
argument is directed at Class II-type gaming, of the sort engaged in by the Tribes
in Cabazon Band, the state cannot regulate and prohibit, alternately, game by
21
Sycuan Band of Mission Indians v. Roache, 54 F. 3d 535 (9th Cir. 1994) at 537.
22
Id. at 539-541.
23
Id. at 540.
106
game and device by device, turning its public policy off and on by minute
degrees.24
Unfortunately the court did not express an opinion as to Class III gaming to help clarify
the discrepancy between the Mashantucket Pequot and Cheyenne River decisions.
Further, the state’s citation of Title 18 of the United State’s Code as granting jurisdiction
over Class III games came to naught:
It is true that under section 1166(a), all state Class III gambling laws ‘apply in
Indian country in the same manner and to the same extent as such laws apply
elsewhere in the State.’ But in the same breath, Congress granted the United
States exclusive jurisdiction to enforce those state laws.25
Regardless of classification, in this case the state lacked the authority to enforce its laws.
The state did not have control over games classified as Class II as a result of the Cabazon
decision. If it was Class III, then the state lacked jurisdiction without a tribal-state
compact, which it did not have with the Barona, Viejas, or Sycuan.
California tribes continued to struggle when Governor Pete Wilson refused to
negotiate on “stand-alone” electronic gaming devices he deemed illegal slot machines, as
well as on live banking and percentage card games he claimed violated California penal
code §330. The Ninth Circuit landed in the position of choosing between precedents
established in Mashantucket Pequot Tribe and Cheyenne River Sioux. In a controversial
decision, the court sided with the Eighth Circuit’s interpretation of IGRA, and completely
disregarded the foundations of the Cabazon decision. Rumsey Indian Rancheria of
24
Sycuan, 54 F. 3d at 539.
25
Id. at 541.
107
Wintun Indians v. Wilson was originally decided on November 15, 1994.26 Four Ninth
Circuit judges disagreed with the case’s panel of judges and requested that the trial be
reheard “en banc.” When a trial is reheard en banc, the entire circuit rules on the case
rather than the regular panel of three judges. Chief Judge John C. Wallace, who ruled on
the original hearing, denied the petition to rehear the case en banc, leading Judge Canby
to write a scathing dissent.
Judge Diarmuid O’Scannlain declared, “Where a state does not ‘permit’ gaming
activities sought by a tribe, the tribe has no right to engage in these activities, and the
state thus has no duty to negotiate with respect to them.” Tribal leaders expressed their
belief that IGRA reinforced the Cabazon rationale of a public policy test that showed that
California clearly did not prohibit gambling as a whole. The state ran a lottery, permitted
horse racing, and non-banked/non-percentage card games. The court, however, “rejected
this reading of IGRA” based upon the “plain language” of the statute.27 In the court’s
opinion, it was clear that California did not “permit” the type of gaming that the tribes
wished to operate:
The fact that California allows games that share some characteristics with banked
and percentage card gaming- in the form of (1) banked and percentage games
other than card games and (2) non-banked, non-percentage card games is not
evidence that the State permits the Proposed Gaming Activities.28
The Ninth Circuit concurred with the Eighth Circuit that IGRA did “not require a state to
negotiate over one form of Class III gaming activity simply because it has legalized
another, albeit similar form of gaming.” The court continued this sentiment stating, “In
26
Rumsey Ind. Rancheria of Wintun Ind. v. Wilson, 64 F. 3d 1250 (9th Cir 1994).
27
Id. at 1257.
28
Id. at 1258.
108
other words, the state need only allow Indian tribes to operate games that others can
operate, but need not give tribes what others cannot have.”29
IGRA’s legislative history seemed to contradict the Ninth Circuit’s opinion,
however, the court found it unnecessary to conduct a thorough review of this history:
“Because we find the plain meaning of the word “permit” to be unambiguous, we need
not look to IGRA’s legislative history.”30 The court glanced at the Senate Report from
Mashantucket Pequot Tribe, but again reached a conclusion different from the Second
Circuit. Rather than using the maxim that “identical language in a statute should be
interpreted to have the same meaning,” the Ninth circuit interpreted the language to have
a different intent. Because the Senate Report specifically named Class II gaming and was
silent on Class III gaming, the court negatively inferred that silence expressed
congressional intent for Class III gaming to receive greater state regulation. From this
inference, the court determined that the State of California need not negotiate over
specific games that it deemed illegal.31
Judge Canby’s dissent and denial of rehearing en banc signaled that the court
misinterpreted congressional intent and IGRA’s entire purpose. Canby argued that the
Ninth Circuit confirmed the Second Circuit’s fear that, without giving states an incentive
to negotiate, IGRA would be rendered “toothless.” In Canby’s view, “The whole idea
was to foster these compacts. That goal is defeated if the details of the state’s regulatory
schemes, allowing some games and prohibiting others, apply if the state does nothing.”32
29
Rumsey, 64 F. 3d at 1257.
30
Id. at 1258-59.
31
Id.
32
Id. at 1253.
109
Canby also believed that the court focused on the wrong word when reviewing IGRA’s
requirements for negotiation. The word “permit” was not as important as the term “such
gaming.” In concurrence with the Second Circuit, Canby stated that “such gaming”
referred to a class of gaming, not a particular individual game. By seeing a negative
inference that simply was not there, the court had misinterpreted IGRA and restricted the
tribal-state compacting process. As with the Second Circuit and Connecticut, Canby did
not want California forced into accepting every tribal demand, he desired only that the
state be open to negotiations. Interestingly, if Judge Canby had offered an opinion
regarding regulation of Class III gaming in his Sycuan decision, he might have set
precedent and deterred the Ninth Circuit from reaching the conclusion it did.33
The different circuit courts had the opportunity to rule on disputes between tribes
and states refusing to negotiate. On October 6, 1994, the Ninth Circuit received another
tribe’s claim that the state acted in bad faith; however, in this situation the tribe and state
had already entered into a tribal-state compact that the state refused to honor. Cabazon
Band of Mission Indians v. Wilson dealt specifically with compacted simulcast parimutuel horse racing.34 Both parties agreed that horse racing fell under Class III gaming.
Per IGRA, the tribe and state entered into a compact, but disagreed over the imposition of
a state licensing fee on the tribe’s simulcast wagering facility. The state admitted that the
fee was indeed a tax, something that the tribe contended was prohibited under § 2710 (d)
(4) of IGRA. This section stated that IGRA did not confer upon the state the “authority
33
Sycuan, 54 F. 3d at 539.
34
Cabazon Band of Mission Indians v. Wilson, 37 F. 3d 430 (9th Cir. 1994).
110
to impose any tax, fee, charge, or other assessment upon an Indian tribe…”35 In what
Indian gaming advocates viewed as a seriously flawed interpretation of the statute, the
court stated that the lack of authority to tax was not a prohibition against taxation. The
court referenced the case of Catholic Social Services, Inc v. Thorburgh, a matter dealing
with illegal immigration.36 The court stated that the phrase “nothing in this section shall
be construed as authorizing petitioners’ admission into the country…,” did not prohibit
admission under the same statute. This may have been true in this instance, but illegal
immigration and taxation under IGRA are two completely separate issues not easily
compared. Thankfully for the tribes, this passage can be disregarded as mere dicta;
remarks used in reaching a decision that lack the full legal force of establishing
precedent. The court thus turned to the question of whether tribal interests preempted
state intervention.
The court illustrated that Southern California OFF Track Wagering Inc, a quasigovernmental organization of racing associations, agreed to pay the tribes a rate of 2.33
percent of all money wagered at their location. Two percent is the standard fee given to
all simulcast locations, while the additional 0.33 percent was contracted as an additional
fee to go directly to tribal governments. With the state’s imposed licensing fee, taken
directly from Southern Californian Off Track Wagering Inc based upon the amount
wagered at the tribal facility, the state ended up making more money than the tribe. From
March 1, 1990, to February 28, 1991, the state collected $292,075 compared to only
$217,386 for the Cabazon. In addition, the Sycuan tribe, who were co-plaintiffs in this
35
25 U.S.C. at § 2710 (d) (4).
36
Catholic Social Services, Inc. v. Thornburgh, 956 F. 2d 914, 923 (9th Cir. 1992).
111
case, received $318,743 for the period of November 1, 1990 to March 3, 1991 in
comparison to $440,175 for the state.37 The state agreed in the compacting process that if
the district court ruled in favor of the tribes, then it would turn over all collected fees to
the tribes. While the district court did not rule in favor of the tribes, the circuit court did.
The Ninth Circuit determined that the imposition of state fees was an economic burden
on the tribes, and that “contrary to the conclusion of the district court, the bands do
indeed have a ‘right’ to the unpaid fees.”38 The state claimed its interest in the gaming
activity was equal to the tribes’ because the actual activity occurred off the reservation.
The court disagreed with this contention stating that, “It is not necessary, as the district
court appears to posit, that the entire value of the on-reservation activity come from
within the reservation’s borders.”39 The court found that tribal interests clearly
preempted those of the state and thus reversed the district court’s decision, ordering that
judgment be entered for the tribes and that the state turn over all collected fees.
In 1996, Indian gaming reached the Supreme Court of the United States for the
first time since the Cabazon decision a decade earlier. Seminole Tribe of Florida v.
Florida, decided on March 27, 1996, was one of the most damaging cases to Indian
gaming interests.40 In a 5-4 decision, that would only have taken one swing vote to
change, the court ruled that the Eleventh Amendment of the U.S. constitution prevented
tribes from suing states without first gaining consent. This ruling completely undermined
IGRA’s provision that states could be sued for failure to negotiate in good faith. Further,
37
Cabazon, 37 F. 3d 430 at 433-34.
38
Id. at 434.
39
Id. at 435.
40
Seminole Tribe of Fla v. Florida, 517 U.S. 44 (1996).
112
the court ruled that a tribe could not sue an officer of the state, particularly the governor,
under the Ex Parte Young doctrine. Chief Justice William Rehnquist delivered the
opinion of the court.
The Eleventh Amendment states: “The Judicial power of the United States shall
not be construed to extend to any suit in law or equity, commenced or prosecuted against
one of the United States by Citizens of another state, or Citizens or Subjects of any
Foreign State.”41 While the Chief Justice admitted that, “Although the text of the
Amendment would appear to restrict only the Article III diversity jurisdiction of the
federal courts,”42 he noted that the amendment contained a “background principle” that
was essential for understanding proper jurisdictional limitations. In the justice’s opinion,
the court has “understood the Eleventh Amendment to stand not so much for what it says,
but for the presupposition…which it confirms.”43 Essentially, rather than taking the
amendment at face value, the court decided to read between the lines. The majority
relied upon the 1890 decision of Hans v. Louisiana that held that each state was
sovereign entity within the federal system and should not be susceptible to suit by an
individual without its consent.44 The only two exceptions to this rule in past court
decisions involved the Fourteenth Amendment or the interstate commerce clause as
determined in the case of Pennsylvania v. Union Gas Co.45
41
U.S. Constitution, XI Amendment.
42
Seminole, 517 U.S. 44 at 54.
43
Id. at 54.
44
Hans v Louisiana, 134 U.S. 1, 13 (1890).
45
Pennsylvania v. Union Gas Co., 491 U.S. 1 (1989).
113
Tribal attorneys argued that while IGRA did not deal with Fourteenth
Amendment issues, Congress’ desire to abrogate a state’s sovereign immunity to suit
under the Indian Commerce Clause was similar to the Interstate Commerce Clause basis
of Union Gas Co. The majority, however, disagreed and declared that their previous
ruling of Union Gas Co. was incorrect and thus overturned. The majority based this
ruling on the premise that a majority of the court in Union Gas did not reach a consensus
as to the power of Congress regarding the Eleventh Amendment and that the decision had
caused much confusion for the lower courts. Rehnquist stated this because Justice Byron
White had agreed in part and dissented in part on the issue. Using this logic, the same
argument could overturn this decision as it was so closely contested. Rehnquist declared
that, although IGRA clearly showed Congress’ intent to abrogate a state’s sovereign
immunity to suit, Congress nevertheless, did not have the power to enforce such an
action.46
Rehnquist further declared that the Ex Parte Young doctrine did not permit tribes
to sue state officials.47 Under Ex Parte Young, the federal government maintains
jurisdiction over suits seeking injunctive relief in order to end a “continuing violation of
the law.” Rehnquist, however, stated that when “Congress has prescribed a remedial
scheme for the enforcement against a State of a statutorily created right, a court should
hesitate before casting aside those limitations and permitting an action against a state
officer based upon Ex Parte Young.”48 The Chief Justice feared using this doctrine could
46
Seminole, 517 U.S. 44 at 54-70.
47
Ex Parte Young, 209 U.S. 123 (1908).
48
Seminole, 517 U.S. 44 at 74.
114
expose a state official to the full force of the law including possible sanctions. He
pointed to IGRA’s remedies under § 2710 as the main reason to avoid this possibility.
One glaring problem was missed in Rehnquist’s logic, however. If the court had just
ruled unconstitutional the portion of § 2710 that allowed tribes to sue states for failing to
negotiate in good faith, how could these remedies be used to prevent an action against an
officer under Ex Parte Young?
Justices John Paul Stevens and David Souter’s separate dissents strongly
criticized the majority’s opinion. Justice Souter’s dissent is a very long and detailed
explanation that traces the origin of congressional power to colonial times. Souter argues
that in its formation the United States did not adopt English common law in its entirety.
The founders clearly rejected granting states absolute power as the King had before the
American Revolution. During the Constitution’s implementation, early American
politicians had two choices concerning the Eleventh Amendment. Theodore Sedgwick
proposed the following text:
No state shall be liable to be made a party defendant, in any of the judicial courts,
established, or which shall be established under the authority of the United States,
at the suit of any person or persons, whether a citizen or citizens, or a foreigner or
foreigners, or of any body politic or corporate, whether within or without the
United States.49
Using this passage, the court would be correct in stating that a tribe, or any other entity,
does not have the right to sue a state under the Eleventh Amendment. This text, however,
was replaced with the more limited language. Souter used this fact to declare that, “The
history and structure of the Eleventh Amendment convincingly show that it reaches only
49
Seminole, 517 U.S. 44 at 111.
115
to suits subject to federal jurisdiction sovereignty exclusively under the Citizen-State
Diversity Clauses.”50
Souter and Stevens’ dissenting opinions further contradicted that of the majority.
The Eleventh Amendment clearly prohibits suit “by Citizens of another State, or Citizens
or Subjects of any foreign state.” Souter argued that, the main reason behind the
Eleventh Amendment was to prevent newly formed states from being sued over war
debts from the recently completed revolution.51 Nowhere does the amendment mention
suits concerning a state’s own citizens, corporations, or entities such as tribal
governments. By declaring that a state has sovereign immunity unless it consents to be
sued, the majority opinion essentially grants ultimate power to state governments. This is
something that not only affects tribal governments and undermines IGRA, but also
affects any citizen or corporation that has a dispute with a state. Why would a state
consent if they can simply claim sovereign immunity and not have to worry about their
actions, or in the case of Indian gaming, inactions? Further, why would a tribe or other
entity be barred from suing a state official for violation of a law? Souter poses the same
question in this manner:
Why would Congress not have wanted IGRA to be enforced by means of a
traditional doctrine giving federal courts jurisdiction over state officers, in an
effort to harmonize state sovereign immunity with federal law that is paramount
under the Supremacy Clause?
As Souter concludes, “There are no plausible answers to these questions.”52
50
Seminole, 517 U.S. 44 at 111.
51
Id. at 130-142.
52
Id.at 182.
116
Before California could claim sovereign immunity from suits concerning Indian
gaming, the California Supreme Court heard a case with ramifications for tribes
attempting to operate casinos in California. Western Telcon, Inc v. California State
Lottery, decided June 24, 1996, involved the state lottery’s operation of a keno game.53
The plaintiffs, a game manufacturing company, and the California Horsemen’s
Benevolent and Protective Association, Inc, sued the lottery claiming its keno game was
an illegal house banked game and therefore essentially a slot machine. The CaliforniaNevada Indian Gaming Association intervened on behalf of the lottery arguing that the
games were not illegal house banked games, nor slot machines. The tribal interests sided
with the lottery, because they desired to operate their own “video lottery terminals,”
currently prohibited as Class III electronic facsimiles of games of chance.
The California State Supreme Court examined state law and determined that a
lottery and a banking game were mutually exclusive. The court separated gambling into
three distinct categories: gaming, lotteries, and betting. Gaming was defined as “the
playing of any game for stakes hazarded by the players.” Within gaming, a lottery was
defined as “any procedure authorized by the commission whereby prizes are distributed
among persons who have paid, or unconditionally agreed to pay, for tickets or shares
which provide the opportunity to win such prizes.” Finally, betting equaled “promises to
give money or money’s worth upon the determination of an uncertain or unascertained
event in a particular way, and may involve skill or judgment.”54 Unlike house banked
games, lotteries make their money simply on the number of tickets sold, not on the
53
Western Telcon, Inc v. California State Lottery, 13 Cal. 4th 475 (1996).
54
Id. at 482.
117
outcome of a particular game. They use the principle of a “player’s pool prize” wherein
the money gained from ticket sales is pooled into a large amount that determines the
amount of the prize contested. It is not a “bilateral” wager between two parties.55
In the California State Lottery’s keno game, a video terminal was used in which a
player selected a certain amount of numbers, up to ten total, numbered from one to
eighty, and made a wager of between $1.00 and $20.00. A centralized computer
randomly drew twenty numbers to determine whether the player won or lost. The game
repeated every five minutes giving the opportunity for continuous play. The court
determined that because the payoff amounts of the game were fixed, the keno game was
not a lottery, but in fact an illegal house banked game. While the game met the
qualifications of subtracting fifty percent of all ticket sales for winnings, and did not
dispense coins or currency, as specified in the California Constitution and government
code respectively, the amount of the winning prize was fixed and not determined on the
amount of tickets sold.56 The court, however, proclaimed that:
The feature that makes CSL Keno a banking game rather than a lottery is not that
it is a numbers game or is played through a computer and video terminal, but that
it offers fixed payoffs to a number of bettors determined by the draw, and that the
operator therefore has a stake in the play of the game.57
Through this statement, tribal leaders gained the concession that they were seeking; their
video lottery terminals were not necessarily prohibited facsimiles of a game of chance.
The determination of whether a game was illegal did not depend on the machine that it
was played on, but on the nature of the betting itself. Because the court refused to answer
55
Western Telcon, 13 Cal 4th at 486.
56
California State Constitution, Article IV, §19.; Gov. Code, §8880.28 Gov’t subd. (a) (1), (3).
57
Western Telcon, 13 Cal. 4th at 494.
118
whether the video lottery terminal was a prohibited slot machine, tribal gaming advocates
gained a bargaining chip in arguing that video machines were not prohibited if operated
as player’s pool prize lotteries rather than house banked games.
Seizing upon the United States Supreme Court’s ruling that a state may claim
sovereign immunity from suit, California completely ignored the Ninth Circuit’s 1994
order to turn over fees collected from the simulcast horse racing operations of California
tribes. The Cabazon, Sycuan, Barona, and Viejas tribes joined to sue California. On
appeal from district court, the Ninth Circuit decided the case of Cabazon Band of Mission
Indians v. Wilson on September 2, 1997. In order to avoid confusion from the previous
court decisions, the court labeled the first district court ruling as “Cabazon I,” and the
Ninth Circuit’s decision in 1994 as “Cabazon II.”58 In this particular case, the state
argued four main points as to why they did not release the funds, and why they should not
be subject to this suit: (1) the state is immune from suit under the Eleventh Amendment;
(2) the state never agreed to surrender the license fees it collected from the racing
industry to the Bands unless the court determined they were an impermissible tax on the
Bands; (3) the compacts are invalid because the racing associations and the horsemen, not
the Bands, are the primary beneficiaries; (4) the Bands materially breached the compacts
by operating illegal slot machines.59
Circuit Judge Stephen S. Trott had little trouble in declaring that each of the
state’s arguments was “unavailing.”60 First, the state willingly entered into negotiations
58
Cabazon Band of Mission Indians v. Wison, 124 F. 3d 1050 (9th Cir. 1997).
59
Id. at 1056-1057.
60
Id.
119
with the tribes in question, they did not refuse to negotiate at all, and therefore waived
their sovereign immunity under the Eleventh Amendment. Second, the clear language of
the compact stated that the tribes “shall seek declaratory judgment against the State from
a United States District Court of competent jurisdiction as to whether deduction and
distribution of the state license fee…are permissible under the Act.”61 Not only did the
state consent to suit, it also clearly stated that if it lost, it would return the fees. When a
state enters into a compact, “the compact terms, not state law, govern the resolution of a
dispute.”62 The court answered the state’s third point in an equally dismissive manner.
Although the license fee fell upon the racing association, the court showed that “The
Bands bear the actual burden of the license fee.”63 The court rejected the state’s
underhanded method of attempting to claim that the compacts should become void
because the tribes were not primary beneficiaries. Finally, using the principle established
in Sycuan v. Roache, Judge Trott ruled that the state held no jurisdiction to enjoin slot
machines and banked and percentage card games because the state did not have a
compact regarding those issues. The federal government held sole authority to prohibit
these activities when the tribes had not consented to state jurisdiction. Once again, the
court ordered judgment in favor of the tribes and for the state to turn over the licensing
fees.
On January 29, 1998, the Eighth Circuit reinforced that the federal government
has authority to enjoin tribal gaming activities in violation of IGRA. United States v.
61
Cabazon, 124 F. 3d 1050 at 1057.
62
Id.at 1058.
63
Id.
120
Santee Sioux Tribe was an appeal of the United States District Court’s refusal to enforce
the National Indian Gaming Commission chairman’s temporary closure order.64 In
February of 1996, following three years of failed negotiations, the Santee Sioux Tribe of
Nebraska decided to open a casino offering video slot machines, video poker, and video
blackjack. The tribe also sued the state in district court for failure to negotiate in good
faith. Following the Supreme Court’s decision in Seminole Tribe of Florida, the district
court dismissed the tribe’s suit because of sovereign immunity. The district court failed
to note the Ninth Circuit’s ruling that when a state entered into negotiations, it voluntarily
waives immunity from suit.65
On April 25, 1996, the NIGC’s chairman entered a notice of violation and order
of temporary closure. The NIGC cited the fact that the tribe did not have a tribal-state
compact, and therefore, was in violation of IGRA. The tribe complied for nearly two
months before reopening their casino. The district court ruled that because the tribe had
appealed the chairman’s order to the NIGC, and that appeal had not yet been finalized,
the district court could not grant civil injunctive relief to enjoin the tribe’s activities. The
NIGC finalized their closure order on July 31, 1996, and again filed a motion with the
district court seeking civil injunctive relief. The district court denied this motion stating
that the NIGC could seek criminal prosecution, but not civil injunctive relief. The NIGC
then appealed to the Eighth Circuit Court of Appeals.
The Eighth Circuit held that the Attorney General may seek enforcement of
closure orders and that the district court erred in refusing to enforce such an order. In
64
United States v. Santee Sioux Tribe, 135 F 3d 558 (8th Cir. 1998).
65
Id. at 559-61.
121
matters concerning the federal government, the Attorney General is the one to act;
therefore, even though IGRA is “silent on the matter of enforcing closure orders or
fines,” the court assumed that Congress intended for him to enforce the order.66 The
court also found that the district court was incorrect in failing to issue an order to enjoin
any further conduct of Class III gaming. They based this conclusion on the fact that
Nebraska law prohibited the specific type of gaming that the tribe was conducting. They
also declared that Title 18 of the United States Code allowed the federal government to
enforce all state gaming laws, which under Nebraska state law included the possibility of
granting civil injunctive relief. The court reached the correct conclusion in this aspect.
Unlike San Diego County’s attempts to enforce state gambling laws in Sycuan v. Roache,
this involved the federal government enforcing state laws. The court correctly granted
jurisdiction over Indian gaming to the federal government because of the lack of a tribalstate compact.67
Court decisions from 1990-1998 were more detrimental than beneficial to tribal
gaming interests. Minor victories in Mashantucket Pequot Tribe, and Cabazon v. Wilson
were overshadowed by the defeats of Cheyenne River Sioux, Rumsey, and Seminole Tribe
v. Florida. California tribes faced negotiating compacts with the disadvantage of the
state being able to simply claim sovereign immunity. California’s tribes, however, had
never backed away from a challenge. In this high stakes showdown, the state appeared a
bit nervous over video lottery terminals being considered legal within the state.
Additionally, the Seminole Tribe v. Florida decision could potentially eliminate all state
66
United States v. Santee, 135 F 3d 558 at 562-63.
67
Id.at 564-66.
122
interests. Amending IGRA to completely bypass state involvement was beginning to
float through the halls of Congress. Beginning in 1998, Indian gaming in California
would undergo a tremendous transformation. While some negative consequences came
from tribal competition and disagreements, the majority of California’s tribes exhibited a
remarkable sense of resourcefulness and ingenuity. If tribal desires could not fit within
California law, then perhaps California law could be changed to fit tribal desires.
123
CHAPTER 5
CALIFORNIA
Following the Western Telcon decision, California Governor Pete Wilson
appeared to retreat from his firm stance against Indian gaming. Tribes being able to
legally operate gaming machines in the form of video lottery terminals without having to
negotiate with the governor undoubtedly led to this more open approach 1 Beginning in
October of 1996, Wilson began negotiations with the Pala Band of Mission Indians.
Located in rural northern San Diego County, with a membership of 867 people and
located on a 12,000 acre reservation, the Pala were a fairly large tribe by California
standards.2 They did not operate a casino when negotiations commenced and viewed
working with Wilson as an opportunity for economic improvement; Wilson equally
viewed the negotiations opportunistically. He desired a tribe without a casino in
operation to negotiate a Class III compact. Wilson wanted to avoid problems of arguing
with the tribe over a reduction in current gaming activities or the prohibition of casino
games that the tribe might already offer. The Pala entered negotiations with a clean slate;
anything was an improvement over nothing. Wilson believed the Pala negotiations could
produce a model compact for all California gaming tribes. After seventeen months of
1
Chad M. Gordon, “From Hope to Realization of Dreams: Proposition 5 and California Indian
Gaming,” in Indian Gaming Who Wins?, ed. Angela Mullis and David Kamper (Los Angeles: Regents of
the University of California, 2000), 4-6.
2
Stand Up for California, “Testimony of Robert Smith, Chairman of the Pala Band of Mission
Indians, before the National Gambling Impact Study Commission, 29 July 1998,”
http://www.library.ucla.edu/mgi/campaign/1998gen/props/prop5/websiteno2/statements/robert_smith_1998_july_29.html (accessed October 10, 2004).
124
negotiations, the two parties reached an agreement and signed the Pala Compact in March
of 1998.3
The Pala Compact would be effective for ten years with the option of two
renewals of five years each. Compact provisions included a prohibition against
complimentary drinks or the extension of credit to gamblers. The age limit for casino
activities was 21.4 State and tribal leaders shared responsibility for licensing gaming
employees, and the state performed background checks on non-tribal employees.5 Tribes
were required to provide annual financial audits, and the Department of Justice received
authority to inspect casino property.6 To protect patrons, tribes had to carry $5 million
worth of liability insurance, and could not use sovereign immunity as a bar.7 The
compact also included an acceptable method of arbitrating patron disputes, worker
protections such as worker’s compensation and the right to collective bargaining for nongaming employees, and cooperation with local governments on road improvements and
fire safety.8 The tribe bore responsibility for reimbursement of any state regulatory
costs.9
The Pala Compact’s terms were extremely favorable to state interests. The state
allowed adopting tribes to operate Class III gaming activities through video lottery
3
Pala Compact.
4
Id. at §§ 9.1-9.3.
5
Id. at §§ 5.1.7, 5.2.4.3.
6
Id. at §§ 6.1, 6.2, 7.1.
7
Id. at §§ 11.1,11.2.
8
Id. at §§ 10.3, 12.3, 12.6, 13.1, 13.3, 13.7.
9
Id. at § 18.1.
125
terminals. Class II card games were permitted, but the state required tribes to erect a
physical barrier between Class II card games and Class III video terminals.10 Sierra
Designs of Reno, Nevada, received an exclusive state contract to develop approved video
lottery terminals for Indian casinos.11 Consequently, the state completely controlled
technical aspects of the game, and eliminated worrying about compact violations
regarding a lottery system versus a house banked game. Each adopting tribal government
of the Pala Compact received a base allocation of 199 machines. As a method of revenue
sharing with tribal governments that could not, or did not want to operate casinos, the
state granted individual tribes the ability to lease a single machine for $5,000.00. Larger
casinos could thus exceed their base allocation and operate up to a total of 975 machines.
Non-gaming tribes that leased out their total allocation of 199 machines could, in return,
earn close to $1 million annually.12 State-wide, the total number of machines in
operation was capped at 19,900 machines. This figure was calculated by multiplying the
estimated number of federally recognized tribes in California (100), by the base
allocation of 199 machines.13 This number was open to renegotiation in March of 1999;
however, the state’s formula caused many tribes an immediate problem. Some groups
already operated more machines than the base allocation allowed. According to
Professor Joseph G. Jorgenson of the University of California, Irvine, the state’s plan
10
Pala Compact at §§ 9.1, 9.2, 9.3.
11
Sam Delson, “Indians, Wilson Showdown Possible,” San Diego Union-Tribune, 9 May 1998, p.
12
Pala Compact at §§ 9.4.1-9.6.2.
13
“Legislative Analysis,” California Voter Information Guide, Primary Election, March 7, 2000.
A-1.
126
would result in a 38 percent net reduction of video terminals state-wide.14 Additionally,
these tribes maintained contracts with outside companies for their current machines, or
simply owned them outright. Making tribes change to only state approved terminals
would further reduce profits and increase costs.
While ten other tribes joined the Pala in accepting Wilson’s proposal, a majority
of California’s tribes rejected the compact. In addition to problems of reducing non-state
approved gaming terminals, tribal leaders found other serious problems with the state’s
proposal. Foremost was Wilson’s authoritarian declaration that “any tribe seeking to
enter into future compact negotiations would have to agree ‘in advance’ to the provisions
contained in the Pala Compact or face immediate closure…”15 Tribal leaders viewed this
as a blatant disregard of tribal sovereignty. To force a group to choose between a
compact in which they were not a negotiating party or immediate closure gave tribes no
real say in their future. Mary Ann Martin Andreas, Chairwoman of the Morongo Band of
Mission Indians, depicted the choice as “suicide or slow death.”16 Further, tribal leaders
opposing the compact found its terms to be heavily weighted toward state interests. The
state demanded tribes voluntarily relinquish sovereignty over environmental controls and
regulation of tribal operations in exchange for very limited gaming.
Especially troubling was the compact’s creation of “economic development
zones.” The legislature established economic development zones, areas of business on
tribal lands not related to Indian gaming. The state would grant technical and financial
14
Joseph G. Jorgenson, “Gaming and Recent American Indian Economic Development,” in Indian
Gaming Who Wins?, ed. Angela Mullis and David Kamper (Los Angeles: Regents of the University of
California, 2000), 100-101.
15
Gordon, “From Hope to Realization of Dreams,” 6.
16
Delson, “Indians, Wilson Showdown Possible,” p. A-1.
127
assistance to encourage tribal businesses and improve tribal economies. While this in
itself was a good idea, the provision had one major catch; the compact reduced machines
in proportion to 50 percent of the net income tribal economic zones generated.17 The
more successful zone businesses became, the fewer video terminals a tribe could operate.
This provision was counterproductive, and revealed the state truly rejected tribes
operating casinos. Under Wilson’s compact, casinos were simply a temporary fix to
tribal economic woes. This was problematic as it again hobbled tribal sovereignty and
self-determination; the idea of economic development zones forced tribes to accept the
state’s plan for economic success rather than allowing Indians to make their own
decisions. The state negated incentives for operating a successful business. Why make
one business venue successful if that success prevents profit in another form? Further,
what prevented tribes from becoming equally successful at both operating casinos and
new forms of business? Could not the tribes become simultaneously economically
independent through both means? Apparently, the state thought not. The leaders of
eighty-eight California tribes rejected what they viewed as a one-sided and very flawed
compact. Rather than argue with Wilson, they decided to take their cause directly to
California’s voters.
On October 10, 1911, the voters of the State of California adopted the initiative; a
means of direct democracy that bypassed the Legislature.18 Through the initiative
process, an individual citizen may appeal directly to the citizens of the state in order “to
17
Pala Band of Mission Indians, “Wilson Signs Compact with Five Additional Indian Tribes,”
http://www.palaindians.com/docs/071398pr.htm (accessed October 10, 2004).
18
California Secretary of State, “A History of California Initiatives,”
http://www.ss.ca.gov/elections/elections_initiatives.htm (accessed October 12, 2004).
128
place an issue of interest on the ballot for voter approval or rejection.”19 Proponents of
any particular issue must first present their proposed initiative to the Attorney General.
The Attorney General will provide an official title and summary. The individual or group
then has 150 days to collect as many signatures as possible in support of placing the issue
on the ballot. To qualify, an initiative designed to change California statutes, requires
that signatures collected exceed 5 percent of the total number of registered voters that
cast a vote in the previous gubernatorial election. If the initiative amends the state
constitution, the petitioners must collect signatures that exceed 8 percent of the same
criteria. The office of the Attorney General then verifies the signatures, typically by
examining a random sample of names on the petition.20
Tribal leaders opposed to Wilson’s Pala Compact placed Proposition 5 on the
November 3, 1998 ballot through the initiative. Entitled “The Tribal Government
Gaming and Economic Self-Sufficiency Act of 1998,” their initiative sought to change
California’s casino gaming statutory law. Proponents, therefore, had to collect signatures
in an amount equal to 5 percent of the previous votes cast in the gubernatorial election, or
419,260. Proposition 5 advocates collected nearly 1.2 million signatures in only three
weeks.21 The campaign, however, proved more arduous than the initial collection of
signatures. Opposition came from several fronts, including tribes who already signed the
Pala Compact, groups adamantly anti-gaming, and most notably Nevada casino operators
who viewed California tribal gaming as a threat to their profit. Corporations such as
19
20
California Secretary of State, “A History of California Initiatives.”
Ibid.
21
Joseph G. Nelson, “California High Court Strikes Down Indian Gaming in Hotel Employees and
Restaurant Employees International Union v Davis,” in Indian Gaming Who Wins?, ed. Angela Mullis and
David Kamper (Los Angeles: Regents of the University of California, 2000), footnote 79.
129
Circus Circus, Mirage Resorts, and Hilton Hotels each gave in excess of $4 million to
defeat Proposition 5; while Station Casinos, Primadonna Resort, Imperial Palace Hotel,
and Harvey’s Casino Resorts also contributed substantially. Of the $14.56 million
reportedly raised in the third quarter before the election, Nevada casinos gave $14.55
million.22 These casinos clearly feared losing the metropolitan, southern-California
market located only 260 miles away on Interstate 15. Overall, Proposition 5 opponents
contributed in excess of $29 million.
Opponents declared Proposition 5 allowed for “a dramatic expansion of
unregulated and untaxed casino gambling throughout California.”23 They argued that
“less than 15 percent of California Indians will receive benefits from this initiative.
Proposition 5 is a grab for advantage by a few wealthy Indian tribes at the expense of all
Californians.”24 They also alleged that exemption from environmental laws could result
in “great environmental damage to California.”25 While these arguments came from nonIndians, the battle over Proposition 5 also caused inter-tribal factionalism. Indian
opponents, particularly Pala leaders, also vociferously opposed Proposition 5. On July
29, 1998, Pala Chairman Robert Smith provided testimony to the National Gambling
Impact Study. Smith portrayed the Pala Compact as “fair to our tribe and the public
interest,” and “truly a ‘model’ that other tribes have successfully built on and gone
22
Jake Henshaw, “Prop. 5 Spending Likely To Set Record,” Gannett Sacramento Bureau, 6
October 1998.
23
“Argument Against Proposition 5,” California Voter Information Guide, General Election,
November 3, 1998.
24
“Rebuttal to Argument in Favor of Proposition 5,” California Voter Information Guide, General
Election, November 3, 1998.
25
“Argument Against Proposition 5,” California Voter Information Guide, General Election,
November 3, 1998.
130
beyond.”26 In labeling Proposition 5 a “cookie-cutter compact imposed on all Tribes and
the State,” Smith essentially turned the Pala Compact opposition’s argument, that of
forced acceptance, against themselves.27 He pointed to environmental and worker’s
protections incorporated in the Pala Compact and declared that these guarantees were
missing from Proposition 5. Smith further stated that the initiative was “penny wise and
pound foolish for tribes.”28 He believed that because the initiative changed only a statute,
but not the California Constitution, it therefore provided any group an opportunity to
propose an initiative to allow casino gaming for their own interests. This then negated
the special relationship between tribes and the government concerning gaming.
Proponents of Proposition 5, however, questioned whether that relationship was truly
special, and were the economic benefits of the Pala Compact substantial enough to
sacrifice sovereignty? Proposition 5 supporters answered no.
Realizing the opposition’s strength, Proposition 5’s proponents, calling
themselves “Californians for Indian Self-Reliance,” countered with a strong campaign
accusing Nevada casinos of “scare tactics.”29 Tribal interests spent over $62 million
countering the opposition’s $29 million, making Proposition 5 the most expensive
initiative in U.S. history.30 Much of this campaign included television commercials
26
Stand Up for California, “Testimony of Robert Smith, Chairman of the Pala Band of Mission
Indians, before the National Gambling Impact Study Commission, 29 July 1998,”
http://www.library.ucla.edu/mgi/campaign/1998gen/props/prop5/websiteno2/statements/robert_smith_1998_july_29.html (accessed October 10, 2004).
27
Ibid.
28
Ibid.
29
“Rebuttal to Argument Against Proposition 5,” California Voter Information Guide, General
Election, November 3, 1998.
30
Gordon, “From Hope to Realization of Dreams,” footnote 20.
131
depicting tribal members belonging to strong communities and desiring the right to make
unhindered decisions and determine their own economic future.31 To achieve economic
independence, tribes asked voters to support a proposition that would benefit both tribal
and state interests. Proposition 5’s authors realized some sacrifice of sovereignty was
necessary to work cooperatively with the state; however, Proposition 5 differed from the
Pala Compact in that the tribes voluntarily relinquished sovereignty, instead of being
forced to do so.
The text of Proposition 5 began with the statement:
The people of the State of California find that, historically, Indian tribes within
the state have long suffered from high rates of unemployment and inadequate
educational, housing, elderly care, and health care opportunities, while typically
being located on lands that are not conducive to economic development in order
to meet those needs.32
To rectify this, Proposition 5 legalized specific forms of Class III gaming, under IGRA
guidelines, on tribal lands. Californians for Indian Self-Reliance declared these gaming
facilities, whether proposed for the future, or already in operation, were “materially
different” from casinos in Nevada or New Jersey.33 This distinction was important since
the California Constitution specifically prohibited “casinos of the type currently operating
in Nevada and New Jersey.”34
Proposition 5’s supporters highlighted these distinct differences. The text of the
proposition stated that casinos in Nevada and New Jersey offered “their patrons a broad
spectrum of house-banked games, including but not limited to house-banked card games,
31
Gordon, “From Hope to Realization of Dreams,”8.
32
Proposition 5 at § 98001(a).
33
Id. at § 98001(c).
34
California Constitution (1849), art. 4, § 19(e).
132
roulette, dice games, and slot machines that dispense currency or coins…”35 Proposition
5, conversely, limited gaming to electronic gaming terminals, similar to those that the
state offered under Pala; lottery games including drawings, raffles, match games, and
instant lottery tickets; off-track simulcast horse wagering; and certain Class III card
games.36 Like Pala, Proposition 5 did not promote the expansion of house-banked
gaming, but dictated that all games “shall pay prizes solely in accordance with a players’
pool prize system.”37 This clearly differed from Nevada and New Jersey style gaming in
the simple fact that the forms of gaming allowed under the proposition were much less
profitable than those found in Las Vegas or Atlantic City. Lower profitability did not
derive from the smaller size of Indian casinos, but from the casino not having a direct
stake in the games played. Unlike Nevada and New Jersey’s house banked games,
Proposition 5’s tribal casinos held no house advantage over their players, thus greatly
reducing the profit margin. Further, profits gained from Nevada or New Jersey style
casinos could be used for any purpose, whereas profits from Indian gaming were
specifically allocated for tribal improvements.
Similar to the Pala Compact, Proposition 5 offered revenue sharing that would
assist non-gaming tribes; however, Proposition 5, unlike Pala, benefitted both the general
public and communities that Indian gaming impacted. In exchange for the exclusive right
to operate Class III gaming enterprises, tribal governments agreed to contribute to three
separate trust funds on a quarterly basis. Proposition 5 proposed a mathematical formula
35
Proposition 5 at § 98001(c).
36
Id. at § 98004.4.1.
37
Id. at § 98004.4.1(a).
133
that deducted three distinct percentages of the average net win of all gaming terminals a
tribe operated.38 Since Proposition 5 did not limit the number of terminals that a tribe
might operate, this number could vary. First, casinos were to declare their total number
of machines per quarter of the year, and determine the average net win of these machines.
They were then to contribute money to each of the three funds based on a specific
percentage rate.
Two percent of the average net win was allocated to the non-gaming tribal
assistance fund. Tribes that had not participated in any form of gaming within the
previous twelve months were eligible to evenly share in quarterly distributions from this
fund.39 This provision was potentially more beneficial than the Pala revenue sharing
plan. Under Pala, the maximum money a non-gaming tribe could receive from leasing
their 199 machine allotment was $995,000.00. Proposition 5 did not have a maximum
benefit. As tribal casinos became more successful, their contributions to the trust funds
would increase, and the benefit to non-gaming tribes would grow proportionately.
Additionally, Proposition 5, unlike Pala, did not advocate the economic development
zones. Thus, tribal casinos were safe from losing casino revenue due to forced
conversion to non-gaming businesses.
In addition to helping non-gaming tribes, Proposition 5 offered assistance to local
communities and governments. Three percent of the average net win was allocated for
emergency medical assistance to the county in which a casino was located and for
developing programs to address problem gambling. Of the 3 percent collected, 2.5
38
Proposition 5 at § 98004.5.1.
39
Id. at § 98004.5.2.
134
percent was appropriated for emergency medical assistance. The trust fund was to
distribute monies based upon a state approved formula that “takes into account the
population, ratio, and emergency medical needs of persons over 55 years of age in each
county…”40 These monies could be used to fund paramedics, emergency phone
operators, or other concerns based on a county’s needs. The remaining 0.5 percent was
set aside to help prevent or treat compulsive and addictive gambling. It may seem
contradictory for a casino to voluntarily help to stop someone from losing money at their
establishment, but problem gambling creates a public relations morass for casinos. In
addressing the issue and helping those with problems, casinos improve their image while
reducing their liability. Although they cannot prevent every problem gambler from
making a bet, much like a liquor store cannot prevent an alcoholic from buying a drink,
the effort to help is important for maintaining a good public image, and it is the morally
correct thing to do. The final trust fund received a one percent contribution given for
local government assistance. Tribal and local government leaders, both on a city and
county level, were to discuss community needs on a “government-to-government
basis.”41 Local governments were to submit written requests, after which a committee
comprised of local government and tribal leaders would grant or deny the request for
funds.
A brief illustration highlights the complexity of the formula for determining the
amount of money contributed to each fund. After calculating the quarterly terminal base,
and determining the average net win, the specified percentages were to be deducted and
40
Proposition 5 at § 98004.5.3.2.
41
Id. at § 98004.5.4.1.
135
assigned to each fund. The formula, however, was not as simple as it appeared. The first
200 terminals that a tribe operated were exempt from making any contributions. The
next 200 contributed at one-half of the specified percentage rate. Any number of
terminals that exceeded these first 400 contributed at the full percentage rate. Using
simple, even numbers, is the easiest way to understand this breakdown; therefore, we will
use 1000 as the quarterly terminal base with a total net win of $100,000.00. Using these
numbers, the average net win equals $100.00 per machine. Supposing that we are
calculating the contribution to the non-gaming tribal assistance fund, 2 percent of
$100.00 equals $2.00. The first 200 machines, however, are exempt and the next 200 are
only charged at one-half of the percentage rate. Therefore, the total contribution would
be calculated as follows: (0 x 200) + ($1.00 x 200) + ($2.00 x 600) = $1,400.00. This
amount represents the total contribution to this fund due in the specified quarter. Using
the same equation, we can calculate the 3 percent emergency medical fund, and 1 percent
local government fund respectively:
Emergency fund = (0 x 200) + ($1.50 x 200) + ($3.00 x 600) = $2,100.00.
Local government fund = (0 x 200) + ($0.50 x 200) + ($1.00 x 600) = $700.00.
A casino with 1000 terminals and a total win of $100,000 would therefore, contribute a
total of $4,200.00 to the three different funds. It is important to remember that this
example uses simple math and a small figure for the total win. In reality, a casino with
1000 machines would typically have a total win that greatly exceeds this example, even if
those machines were forced to use the player’s pool prize system rather than the more
profitable house banked format.
136
Proposition 5 established ground rules for individual tribes. Each operation was to
be “owned solely by the Tribe.”42 If a tribe contracted with an outside corporation for
management of their casino, the management contract had to provide for advancement of
tribal members to key positions, and the contractor was to ensure that its primary goal “is
to prepare the Tribe to assume the control and conduct of the operation and facility.”43
The minimum age for casino patrons was set at 18 with the possibility of higher age
limits depending on the availability of alcohol at any specific establishment.44 Tribal
property building and safety codes had to meet tribal standards and had to “meet the
standards of either the building and safety codes of any county within the boundaries of
which the site of the facility is located or the Uniform Building Codes (of the state).”45
Tribal operations had to conform with United States Public Health Service requirements
for food and beverage handling, and also to federal regulations regarding safe drinking
water.46 Tribal governments were to carry two million dollars in public liability
insurance, and the tribe had to “provide reasonable assurance that those claims will be
promptly and fairly adjudicated, and that legitimate claims will be paid.”47 Tribes,
however, were not forced to accept claims for attorney’s fees or punitive damages. No
mention is made in Proposition 5 regarding sovereign immunity from suit regarding a
monetary matter.
42
Proposition 5 at § 98004.6.2.
43
Id. at § 98004.6.2.
44
Id. at § 98004.6.3.
45
Id. at § 98004.6.4.2.
46
Id. at § 98004.10.1.
47
Id. at § 98004.10.1.
137
A key difference between Proposition 5 and the Pala Compact was that the
regulation of gaming facilities and licensing procedures fell primarily upon the tribal
gaming agency rather than the state. State authorities were not entirely without influence
nor were tribal governments able to approve any measure carte blanche. Tribal
governments had to ensure that their operations were “generally free from criminal and
dishonest elements and would be conducted honestly.”48 In granting tribal gaming
licenses, an applicant had to be “a person of good character, honesty, and integrity.”49
Tribal governments had to perform background investigations to forestall hiring anyone
with a criminal record or who posed a threat to the honest operation of the casino. The
state also had recourse to licensing non-tribal gaming employees. If the state so desired,
it could object to the hiring of an individual employee by writing to the tribal gaming
agency. The tribal gaming agency, however, had the power to take action. If the tribal
gaming agency disagreed with the state’s assessment, it could refuse to act until the issue
was resolved through the dispute resolution process.50 In this process, both parties agreed
to meet in good faith to negotiate a solution to any dispute. If an agreement was not
reached within twenty days of the first meeting, then both parties would seek binding
arbitration.
Proposition 5 could potentially benefit all of California’s citizens, both Indian and
non-Indian alike, and in a manner that preserved tribal sovereignty by giving tribal
governments an active role in establishing provisions and guidelines for tribal-state
48
Proposition 5 at § 98004.6.4.3.
49
Id. at § 98004.6.4.2.
50
Id. at § 98004.6.5.6.
138
compacts. This differed from the Pala Compact which was strongly favored towards
state interests and excluded the opinions of the majority of California’s tribes.
Proposition 5 provided guarantees for the state such as the ability to inspect casino
property and audit financial records.51 It also gave protections to patrons and employees
alike. On November 3, 1998, the people of California overwhelmingly expressed their
support for Indian self-reliance as Proposition 5 received 5,092,446 yes votes (62.38%)
as opposed to 3,071,422 no votes (37.62%). The victory was a great one for California’s
gaming tribes; however, it was to be short lived.
Less than a year after passage, the California Supreme Court heard a challenge to
the constitutionality of Proposition 5. A service union, the Hotel Employees and
Restaurant Employees International Union (HERE) disliked the fact that Proposition 5
did not allow for collective bargaining of employees. The union felt casino employees,
especially non-gaming employees, deserved representation regardless of whether these
employees asked for it. Therefore, on November 20, 1998, HERE filed for a writ of
mandate (a court order to a government agency to correct previous actions, cease illegal
activities and to follow the law) and stay pendente lite (Latin for pending litigation)
arguing that Proposition 5 violated article IV, section 19(e) of the California Constitution
which prohibited casinos of the type operated in Nevada and New Jersey. These actions
would prevent Proposition 5 from going into effect pending the outcome of litigation. On
December 2, 1998, the Fourth District Appellate Court granted the writ of mandate and
stay deciding to hear the matter themselves rather than to allow a lower court to address
the issue. Because of the stay the Governor did not execute the agreements within the
51
Proposition 5 at § 98004.7.4.3.
139
measure’s 30 day provision. Therefore, the Secretary of the Interior disapproved all
compacts requested under Proposition 5 on January 22, 1999. Again, the courts were
called upon to determine the legality of Indian gaming in California. 52
On August 23, 1999, the California Supreme Court invalidated Proposition 5 in
the case of Hotel Employees & Restaurant Employees International Union v. Davis.53 A
6-1 decision, the ruling contained an apparent misinterpretation of the court’s own
previous opinion in Western Telcon Inc v. California State Lottery.54 In the former case,
the court determined that the California State Lottery’s operation of a keno game was an
illegal house banked game. The court found that the lottery did not derive its profits
based upon the amount of people playing, but on the immediate outcome of each
individual game. The lottery in essence acted as a bank, taking on all players, collecting
from all losers, and paying all winners. The court did not state, however, that keno could
not be operated as a lottery. It simply declared that, because the California Lottery had a
direct interest in the outcome of each game, in its present state keno was a house banked
game.55
Justice Kathryn Werdegar delivered the majority opinion in Hotel Employees v.
Davis, in which the court declared Proposition 5 to be a violation of article IV, section
19(e) of the California Constitution. In the majority’s view, Proposition 5 would allow
tribal casinos that were similar to those operated in Nevada and New Jersey. The court
determined that the player’s pool prize system did not act as a lottery, but rather as a
52
Hotel Employees & Restaurant Emps. Int. Un. v. Davis, 21 Cal. 4th 585 (1999).
53
Id.
54
Western Telcon, Inc v. California State Lottery, 13 Cal. 4th 475 (1996).
55
Id. at 486-494.
140
house banked game. The court based this belief on the theory that the house held an
interest in the outcome of each game played, stating:
The more the players’ pool collects from losers and the less it pays to winners, the
lower the tribal operator’s costs – the less likely it will be compelled to lend seed
money to the players’ pool in the future, the more likely it will be able to obtain
repayment of seed money lent to the pool in the past. Conversely, the less the
pool collects and the more it pays, the higher the operator’s costs.56
The court reasoned that the casino would desire players to lose as a way of lowering costs
and therefore increasing profits. This logic contradicts the basic definition of a player’s
pool prize system. Using the court’s interpretation, all forms of gaming including
California’s legal poker rooms and the lottery itself would be considered house banked.
For example, if nobody wins the lottery, then the jackpot grows larger and larger. As the
amount of the prize increases, more people tend to play which increases sales, and thus
generates more revenue which can offset costs such as advertising. Therefore, under the
court’s ruling, the lottery technically would also be a house banked game. The court
believed that a casino with a player’s pool prize system would be interested in whether
players won or lost. However, casinos with this type of gaming are more concerned with
simply keeping gamblers playing for as long as possible. The longer that someone plays;
the more fees a casino may collect. In fact, in games such as poker, if too many players
lose too quickly, the game may shut down and prevent the casino from making any
further profits.
The court further negated the contention of Proposition 5 supporters that Indian
casinos were materially different from those of Las Vegas or Atlantic City. In the court’s
opinion, the fact that tribal gaming terminals operated on a player’s pool prize system,
56
Hotel Employees, 21 Cal. 4th at 608.
141
did not dispense coins or currency, and could not be operated by a lever did not
differentiate them from traditional slot machines. Justice Werdegar adamantly stated,
“Nor would the voters on the 1984 constitutional amendment likely have understood
section 19(e) to permit casinos so long as the slot machines therein were activated by
buttons rather than levers, and dispensed chips or electronic credits rather than coins.”57
Additionally, the prohibition against free alcohol, absence of craps or roulette, and the
fact that casinos were individually owned on isolated reservations, did not sway the
opinion of the court. The court stated, “These asserted characteristics, however, fail
meaningfully to distinguish casinos authorized under Proposition 5 from those prohibited
by section 19(e).”58
Although Proposition 5 stated that tribal casinos were “materially different” from
those in Nevada and New Jersey, the court held that this assertion was not a finding of
legislative fact, but rather an interpretive “construction of the anti-casino provision of
section 19(e).”59 The power to interpret the California Constitution was left to the
judiciary, not the legislative branch of government. Having concluded that tribal casinos
violated a constitutional provision, the court determined that the legislative body of
California, either the Legislature or the people, could not permit tribal casinos as a matter
of statutory law. Section 19(e) prevented “any future legislative authorization of such
casinos without constitutional amendment.”60 The court thus invalidated Proposition 5
because it was not a constitutional amendment. The only portion of Proposition 5 that the
57
Hotel Employees, 21 Cal. 4th at 609.
58
Id. at 609.
59
Id. at 608.
60
Id. at 603.
142
court found to be severable was the State’s waiver of sovereign immunity from suit.
Although the remainder of Proposition 5 was voided, this declaration was key in that
California would be forced to at least negotiate with tribes over casino gaming, as it had
been required to do prior to the Seminole decision.
The lone dissenter in Hotel Employees, Justice Joyce L. Kennard contended that
the proposed gambling under Proposition 5 was not a violation of the California
Constitution. She argued that a player’s pool prize system was not a house bank, and that
the power to authorize or prohibit Indian gaming was entirely a federal matter. Kennard
declared that, “A players’ pool prize system has none of the characteristics of a banking
game.”61 She pointed to the obvious differences in that the house does not have a direct
interest in the outcome of each individual game, and that even if players lose and build a
larger pool of funds for prizes, the casino itself does not keep any of the additional
money. Further, the fact that the pool collects from all winners and pays all losers does
not depict that it is a bank, as Kennard stated, “those functions necessarily occur in every
form of gambling.”62 Regardless of whether the games in question were banked or
pooled, Kennard maintained that only the federal government could authorize or prohibit
gaming. A state may “shape the contours of the federal authorization,” but it cannot
“directly prohibit Indian gambling as such.”63 In Kennard’s view, the California
Supreme Court was exceeding its jurisdiction as the power to prohibit Indian gaming was
beyond the limits of the state’s sovereignty: “California can no more authorize gambling
61
Hotel Employees, 21 Cal. 4th at 625.
62
Id. at 627.
63
Id. at 620.
143
on Indian lands than it can authorize gambling in another state.”64 Citing Cabazon and
IGRA, Kennard concluded that federal jurisdiction preempted that of the state, and
therefore Proposition 5 could not be a violation of the California Constitution, since
Indian gaming was not subject to it. Despite Kennard’s approach to the subject, the
majority’s opinion was the one that mattered to Indian gaming advocates. Faced with yet
another obstacle, California’s Indian tribes would have to regroup and adjust in order to
achieve their goal.
In addition to Proposition 5, the 1998 election provided another event of
significance to California Indian gaming. The election of Gray Davis as governor
marked a change in the ideological position of the executive branch towards Indian
gaming. Davis’ Republican predecessor, Pete Wilson, had adamantly opposed most
tribal efforts to incorporate gaming. When Wilson agreed to negotiate, he did so on a
level that was heavily favored towards his own interests. Davis, a Democrat, at first
remained neutral on the issue. During the Hotel Employees case, the court ordered the
governor to file a return by way of answer as a response to the petition for writ of
mandate. Davis withdrew the response of former governor Wilson that supported the
Union’s objections to Proposition 5 and filed his own response refusing to state a position
supporting either side.65 However, following the court’s ruling, Davis exhibited a
willingness to negotiate with tribes. It is important to note that Indian gaming is not a
partisan issue. Supporters and objectors come from all over the political spectrum. It is
therefore, important to examine key elements that may have led Davis to take such an
open approach.
64
65
Hotel Employees, 21 Cal. 4th at 621.
Id. at 591.
144
Several factors most likely influenced Davis’ relationship with supporters of
Indian gaming. First, the election clearly showed the people of California in favor of
granting tribes the right to operate casinos. The proposition passed by an overwhelming
majority of more than two million votes. Second, despite California Supreme Court’s
ruling, tribal leaders declined to quit efforts to legalize Indian gaming. The court upheld
Proposition 5’s clause declaring California had waived its sovereign immunity to suit;
therefore, Davis knew he could not use the Eleventh Amendment as a means of avoiding
future negotiations. Finally, the most influential issue was Congressional efforts to
amend IGRA. For several years, members of Congress had advocated amendments to
IGRA, but those efforts had always stalled in committee.
In 1999, Colorado Senator Ben Nighthorse Campbell introduced Senate Bill 985
entitled the “Intergovernmental Gaming Agreement Act of 1999.” The proposed
amendment had two major provisions that would change the foundation of negotiations
between tribes and states. To maintain centralized dispute resolution, the U.S. District
Court for the District of Columbia would maintain jurisdiction over all legal action
regarding Indian gaming compacts. These disputes, however, would no longer
necessarily include states. To rectify the Seminole decision, which allowed states to
exercise Eleventh Amendment sovereign immunity, Campbell suggested changing the
term states “shall” negotiate with tribes upon request, to states “may” negotiate. If a state
refused to negotiate, then tribal leaders could completely bypass the state and negotiate
directly with the Secretary of the Interior. Indian gaming advocates such as Richard G.
Hill, president of the National Indian Gaming Association, hailed Campbell’s proposal
for “providing a politically neutral solution to the current ‘right but no remedy’ situation
145
created by the Seminole decision.”66 Hill believed IGRA was useless if it granted Indian
tribes the right to negotiate gaming contracts without a way to enforce this right.
Raymond C. Scheppach, executive director of the National Governors’ Association, took
an opposite viewpoint. He believed that Senate Bill 985 took away incentives for tribes
to negotiate with states and would infringe upon a state’s sovereignty. Scheppach
contended that the Rumsey and Seminole decisions had clearly demonstrated the
judiciary’s belief that a state held sovereign immunity from suit. Changes in IGRA
would, in Scheppach’s opinion, make the National Indian Gaming Commission more
important than “state constitutions, laws, and regulations.”67 Senate Bill 985, like its
predecessors, stalled in committee, and never made it to the floor. The simple threat,
however, that state governments might be bypassed had the undoubted effect of causing
governors to rethink staunch anti-gaming policies in favor of more open approaches. One
such governor was Gray Davis.
In September of 1999, less than one month after the California Supreme Court
invalidated Proposition 5, Gray Davis negotiated and the legislature approved tribal-state
compacts with fifty-eight tribes, including those that had signed the Pala Compact.68
Unlike the Pala Compact, which had taken seventeen months to negotiate, the text of the
model compact that Davis offered took merely two weeks to draft.69 Davis’ compact
66
Congress, Senate, Committee on Indian Affairs, Testimony of Richard G. Hill, Chairman
National Indian Gaming Association, Intergovernmental Gaming Agreement Act of 1999: Hearing before
the Senate Committee on Indian Affairs, 106th Cong., 1st sess., 21 July 1999.
67
Congress, Senate, Committee on Indian Affairs, Statement of Raymond C. Scheppach on behalf
of The National Governors’ Association, Intergovernmental Gaming Agreement Act of 1999: Hearing
before the Senate Committee on Indian Affairs, 106th Cong., 1st sess., 21 July 1999.
68
“Legislative Analysis,” California Voter Information Guide, Primary Election, March 7, 2000.
69
Gordon, “From Hope to Realization of Dreams,” 9.
146
borrowed key elements from both Pala and Proposition 5. The governor was adamant on
guaranteeing workers the right to unionize. Many tribal leaders viewed this as an
infringement upon sovereignty, and a survey of California’s tribal casino employees
showed that their benefits, hours, and compensation were far superior to comparable jobs
in Nevada.70 Despite these objections, tribal leaders knew that to gain favorable
contracts, they had to be willing to make some concessions. They therefore agreed to
Davis’ demand for worker’s protections and the right to collective bargaining. What they
received in exchange was a compact that was far superior to either Pala or Proposition 5.
The court’s nullification of Proposition 5 in the Hotel Employees decision turned
out to be a blessing in disguise for California’s gaming tribes. This was due to one key
difference between what Davis offered in comparison to the former compacts; the new
compacts specifically authorized certain forms of house banked Class III games,
including all card games and slot machines.71 Rather than simply collecting a fee from
players for the use of their facilities, Indian casinos could directly wager their money
against that of the player. Since all casino games contain a house advantage, this
signaled the potential for much larger profits than could be gained under the player’s pool
prize system. Additionally, the compact defined “gaming device” specifically as a “slot
machine.”72 This definition put an end to the controversy of whether or not a gaming
device was a video lottery terminal or a slot machine. Slot machines are the biggest
money makers for casinos, taking in more than 80 percent of all gambling losses.
70
Gordon, “From Hope to Realization of Dreams,” 10.
71
Model Tribal-State Gaming Compact at § 4.1.
72
Id. at § 2.6.
147
Casinos might have been marginally profitable under the Pala Compact, and even more
so under Proposition 5, but with Davis’ compact, Indian tribes truly hit the jackpot.
Tribes were allowed no more than two gaming facilities each and the maximum
number of slot machines that a tribe could operate under the compact was set at 2,000.73
This limitation, however, did not guarantee that all tribes would be granted 2,000
machines each. Tribes were initially entitled to operate the same number of terminals
that were in use at their casino on September 1, 1999. If a tribe had not previously
offered casino gaming, or operated less than 350 machines, then its initial base allocation
of games was set at 350.74 These terminals were classified as “entitlements.” Machines
that were already in existence were “grandfathered” games, while “additional
entitlements” referred to the number of machines required to bring a tribe’s total up to
350. In an interview, Frank Lekner of the California Gambling Control Commission
stated that the total number of entitlements was 29,806 machines of which 19,005 were
grandfathered, and 10,801 were additional entitlements.75 Beyond the original
entitlements, tribes could acquire licenses in order to increase the total number of
machines that they maintained. The total number of licenses available, however, was
fixed at a specific amount based upon a complex mathematical formula.76 According to
Frank Lekner of the California Gambling Control Commission, this figure was
73
Model Tribal-State Gaming Compact at § 4.3.2.2.
74
Id. at § 4.3.1.
75
Frank Lekner of the California Gambling Control Commission, interview by author, telephone,
Stevens Point, Wi., 19 October 2004.
76
Model Tribal-State Gaming Compact at § 4.3.2.2. The compact states “The maximum number of
machines that all Compact Tribes in the aggregate may license pursuant to this section shall be a sum equal
to 350 multiplied by the number of non-compact tribes as of September 1, 1999, plus the difference
between 350 and the lesser number authorized under Section 4.3.1.”
148
determined to be 32,151.77 To ensure fairness and equality among the groups requesting
licenses, tribes with the least number of machines received priority in drawing.
According to Frank Lekner, the limited number of available licenses did not cause any
immediate problems. Not all tribes were capable of, or even desired, operating 2,000
machines; therefore, every group that requested a specific number of licenses from the
first round of draws received that amount.
Like Pala and Proposition 5, the model compacts signed with Governor Davis
provided for a method of revenue sharing. This method, although of greater benefit to
tribal interests, was more complex and confusing than the formulas espoused in the
previous compacts. The Davis Compact consisted of two separate trust funds, “The
Revenue Sharing Trust Fund” and “The Special Distribution Fund.”78 Tribes that
acquired licenses for additional machines beyond their original entitlements were
required to pay into the Revenue Sharing Trust Fund. For every licensed machine
gained, the tribe was to pay a one-time fee of $1,250.00. If a tribe received more than
350 licenses, then it was assessed an additional annual fee that was to be paid on a
quarterly basis. The payment scale was broken down as follows:
Fee Per Device Per Annum
$0.00
$900.00
$1950.00
$4350.0079
Number of Licensed Devices
1-350
351-750
751-1250
1251-2000
77
Frank Lekner of the California Gambling Control Commission, interview by author, telephone,
Stevens Point, Wi., 15 October 2004.
78
Model Tribal-State Gaming Compact at § 4.3.2.
79
Id. at § 4.3.2.2.
149
As an example, if a tribe that operated 500 machines as of September 1, 1999, acquired
licenses to obtain 500 additional machines, the following payments would be made to the
fund: One-time fee of $625,000.00 (500 x $1,250.00), quarterly fee of $33,750.00 (First
350 licenses x $0.00 + 150 licenses x $900.00 annual fee per device / 4 quarterly
payments).80 The money paid into this fund was designated solely for disbursement to
“non-compact” tribes. Non-compact tribes were described as groups without any
gaming, or casinos that operated 350 machines or less. Each non-compact tribe was
granted an equal share in the funds collected with the maximum payment set at $1.1
million per tribe.81 This guaranteed that all California tribes would benefit from Indian
gaming regardless of whether or not they directly participated in casino operations.
The second of the two funds, the Special Distribution Fund was established to
help alleviate the costs of state regulation while helping the public in general. Monies
collected were first given to the state for reimbursement of regulatory costs.
The
remaining funds were allocated for programs to address gambling addiction, and to
support local governments. Frank Lekner of the California Gambling Control
Commission indicated that $3 million is set aside for problem gambling, and all monies
left over are used to assist local governments with problems such as road and sewage
repair, emergency police and medical services, or any other issues that may arise as a
80
The determination of this figure was achieved only after intense scrutiny of the compact and the
author’s telephone interview with Mr. Lekner of the California Gambling Control Commission. An initial
reading of the compact would appear to indicate that the annual fees would be charged based on the total
number of machines in operation. It is necessary, however, to deduct machines classified as “entitlements”
in order to find the true amount of strictly “licensed” terminals, as those are the ones used in determining
how much a tribe is required to pay to the fund.
81
Model Tribal-State Gaming Compact at § 4.3.2.1.
150
result of casino gambling within a local community.82 A provision was included which
allowed the state to backfill any shortfalls in the Revenue Sharing Trust Fund with money
from the Special Distribution Fund. This created the potential of lowering the availability
of Special Distribution funds.
Contributions to the Special Distribution Fund were determined by §5.0 of the
compact which provided a payment schedule that calculated specific percentages of the
average net win of any tribe based upon the number of terminals that were in operation
on September 1, 1999:
# of Terminals in Quarterly Base
Percentage of Average Net Win
0-200
0%
201-500
7%
501-1000
7% on machines #201-500,
plus 10% on #501-1000.
1000+
7% on machines #201-500,
plus 10% on #501-1000, plus
13% on any number more
than 1000.83
It is important to understand that the fund applied only to the number of machines in
operation on September 1, 1999. Tribes that operated less than 200 machines, including
those that did not have any type of gaming did not have to pay into the fund.
Additionally, the percentage of the average net win that tribes owed to the Distribution
Fund did not change if they added additional machines. The only obligation that tribes
82
Frank Lekner of the California Gambling Control Commission, interview by author, telephone,
Stevens Point, Wi., 19 October 2004.
83
Model Tribal-State Gaming Compact at § 5.1.
151
shouldered for adding machines were the licensing fees owed to the Revenue Sharing
Trust Fund.
A hypothetical example illustrates exactly what amounts a tribe paid under this
formula. On September 1, 1999, Tribe A has exactly 1000 machines. Through the
licensing process, they acquire additional machines until they reach their current level of
1500 machines total. Their total net win for all 1500 machines for the quarter is $1.5
million; therefore the average net win per machine is $1,000.00. The total amount of
money paid to both the Revenue Sharing Trust Fund and the Special Distribution Fund
would be calculated as follows:
Revenue Sharing Fund
(500 licenses x one-time fee of $1,250.00) = $625,000.00.
(350 licenses x $0.00)+ (150 licenses x $900 annual fee) / 4 quarters = $33,750.00.
Special Distribution Fund
(200 x $0.00) + (300 x 7% of $1,000.00) + (500 x 10% of $1,000.00) =
(200 x $0.00) + (300 x $70.00) + (500 x $100.00) = $71,000.00.
It is important to note that the last 500 machines were not included in the calculation of
the Special Distribution Fund, but were instead part of the Revenue Sharing Fund. They
are, however, included in determining the quarterly average net win for purposes of the
Special Distribution Fund. The key aspect of all of the calculations is that, under the
Davis Compact, tribes were obligated to pay portions of their profits gained from slot
machines to separate funds for the benefit of other Indian tribes and the general public
while relieving the burden placed upon state and local governments.84
84
Table games were not included in either of the funds. In our interview, Frank Lekner indicated
that there are no limits on the number of table games that a tribe may operate, and that all profits gained
from table games go directly to the tribe without any type of revenue sharing.
152
The procedural provisions of Davis’ compact varied little from those of
Proposition 5. Tribal and state gaming agencies shared in the procedures of licensing
gaming employees. Tribal gaming agencies were responsible for background
investigations and the initial licensing of employees. Candidates for employment were to
be free from “criminal and dishonest elements,” and were to exhibit, “good character,
honesty, and integrity.”85 The state gaming agency maintained the right to review and
possibly revoke gaming licenses. The state’s power, however, was limited. Tribal
gaming agencies could decline to revoke the license of any gaming employee who was
also a tribal member. Additionally, during the original licensing process, tribes could
retain certain non-tribal employees the state had refused to license. If a tribal casino
already employed an individual for at least three years prior to the new compact, and the
state’s denial of a license was based on activities that occurred before the new
application, the tribal gaming agency could keep that employee.86 In this manner, tribal
gaming agencies maintained a level of sovereignty.
In addition to licensing procedures, Davis’ compact contained other provisions
similar to those found in Proposition 5. State gaming agencies could investigate tribal
operations with respect to Class III gaming only. Agents could inspect public areas of
any facility at any time during normal business hours without prior notice. Inspection of
private areas of the facility, including the copying of any papers, books, or records for
auditing purposes, could be conducted immediately after an agent identified him or
85
Model Tribal-State Gaming Compact at § 6.4.2.
86
Id. at § 6.4.3.
153
herself to the tribal gaming agency.87 To ensure honest operation and prevent illegal
activity, no specific amount of time was required as prior notification. An agent could
appear at any time and request access to casino information. Like Proposition 5, building
and safety codes were to be equivalent to those of the county that a property was located
in or the Uniform Building Codes.88 Tribes were required to carry $5 million in liability
insurance, in which claims were to be settled in a prompt and just manner. Again, tribes
were not required to pay punitive damages or attorney’s fees.89 The compact further
dictated that, in the event of a disagreement between a patron and casino over the
outcome of any game, “the matter shall be handled in accordance with, industry practice
and principles of fairness…”90 Every assurance was made between the state and
respective tribal gaming agencies that all operations would be maintained in a safe,
healthy, and honest manner. To ensure a good public image, it was in the best interest of
tribal gaming agencies that the conditions of the compact be followed as precisely as
possible. If a casino was viewed as violating the compact, it could create a poor public
image which could result in less patronage and therefore less profit.
Section ten of the model compact exhibits Gray Davis’ insistence on expanded
worker’s protections and rights. Tribal gaming agencies were required to provide a work
environment that met or exceeded federal standards regarding occupational health and
safety.91 Although tribal members could be granted preferential hiring for key positions,
87
Model Tribal-State Gaming Compact at §§ 7.4.1-7.4.3.
88
Id. at § 6.4.2.
89
Id. at § 10.2.
90
Id. at § 8.1.10.
91
Id. at § 10.2 (e).
154
tribal gaming agencies could not discriminate against any current or potential employee
on the basis of race, color, religion, national origin, gender, sexual orientation, age, or
disability.92 Davis gave tribes the choice of participating in the state’s workers’
compensation system or providing a similar system for guaranteeing that work-related
claims or grievances be resolved through insurance offered by the tribes.93 The state did
not offer a choice in regards to unemployment insurance. All tribes signing the model
compact were obligated to withhold state taxes from the paychecks of all non-tribal
employees for the purpose of unemployment insurance.94 Davis demanded employees
have the right to organize. If by October 13, 1999, tribal leaders did not provide the state
with an acceptable procedure for allowing workers to seek organized representation, then
the compact would be voided.95 Tribal leaders, therefore, exchanged a portion of their
sovereignty for a workable and acceptable compact. One important benefit of taking
such action was that unions such as the Hotel Employees and Restaurant Employees
International Union no longer opposed Indian gaming.
On September 10, 1999, Gray Davis signed tribal-state compacts with fifty-eight
California tribes. Once ratified, the compacts were effective for twenty years, until
December 31, 2020.96 Ratification, however, was entirely dependent upon the outcome
of the March 7, 2000, primary election. Proposition 5 was deemed void because it
92
Model Tribal-State Gaming Compact at § 10.2 (g).
93
Id. at § 10.3.
94
Id. at § 10.3 (b), (c).
95
Id. at § 10.7.
96
Id. at § 11.2.1.
155
violated section 19(e) of the California Constitution. The new compacts would face the
same fate if the California Constitution was not amended. As a result of the Hotel
Employees decision, and the desire of the governor to negotiate legitimate compacts, the
Legislature proposed State Constitutional Amendment 11. Amendments to the California
Constitution require a two-thirds majority vote in both the Assembly and the Senate, and
approval from the state’s voters.97 State Constitutional Amendment 11 clearly passed,
75-4 in the Assembly and 35-0 in the Senate.98 Following approval, the Legislature
presented State Constitutional Amendment 11 to the voters as Proposition 1A. Unlike
Proposition 5, Proposition 1A proposed a direct constitutional amendment rather than a
simple statutory change. The text of the amendment specifically permitted “the operation
of slot machines and for the conduct of lottery games and banking and percentage card
games by federally recognized Indian tribes on Indian lands in California in accordance
with federal law.”99 Passage of Proposition 1A would exempt Indian gaming from the
restrictions of section 19 (e). The fate of California’s Indian people once again was in the
voters’ hands.
Proposition 1A faced opposition from the usual anti-gambling factions that
predicted California would become a “Las Vegas-by-the-Sea.”100 They proposed the
passage of Proposition 29 as an alternative to Proposition 1A. Proposition 29 advocated
97
Andrew Rolle and John S. Gaines, The Golden State: California History and Government
(Wheeling, Illinois: Harlan Davidson, Inc., 1990), 232.
98
“Analysis by the Legislative Analyst, Proposition 1A,” California Voter Information Guide,
Primary Election, March 7, 2000.
99
Proposition 1A.
100
“Argument for Proposition 29,” California Voter Information Guide, Primary Election, March
7, 2000.
156
the ratification of the Pala Compacts that had not yet become law. Although the
Legislature had ratified former Governor Wilson’s compacts in August of 1999, many
individuals in California opposed any form of Indian gaming. Besides the initiative, the
California Constitution allows for an additional method of direct democracy: the
referendum.101 If the people oppose the actions of the Legislature, they may circulate a
petition in order to force the issue to a state-wide vote. The opponents of Indian gaming
collected enough signatures to place Proposition 29 on the March 2000 ballot. Although
not entirely opposed to any forms of gaming, proponents of Proposition 29 believed that
its passage would give California’s tribes the ability to operate gaming enterprises
without rampant and unregulated casino expansion. The voters were therefore, given a
choice between Proposition 1A and Proposition 29.
On March 7, 2000, the voters of California approved Proposition 29 by a 53.1
percent to 46.9 percent margin; however, they also overwhelmingly supported
Proposition 1A with a 64.5 percent to 35.5 percent margin and a difference of more than
two million votes.102 With both propositions passing, Proposition 29 became obsolete.
Proposition 1A offered a superior compact that fifty-eight tribes, including those who
signed the Pala Compact, accepted and therefore was deemed the legally binding contract
between California and the tribes. Thirty years after the Rincon tribe of San Diego
County first attempted to open a tribal casino, thirteen years after the Cabazon tribe
gained victory in the Supreme Court for tribes across the nation, twelve years after
Congress provided the groundwork for legalized Indian gaming, following years of
101
California Constitution (1849), art. 2, § 9.
102
California Secretary of State, “Statement of Vote 2000 Primary Election March 7, 2000,”
http://www.ss.ca.gov/elections/sov/2000_primary/contents.htm (accessed October 11, 2004).
157
setbacks from the Ninth Circuit in Rumsey, the U.S. Supreme Court in Seminole, and the
California Supreme Court in Hotel Employees, surviving years of Pete Wilson and an
unacceptable compact, and twice taking their cause to the voters of California,
California’s Indian tribes finally had legalized Class III casino gaming.
158
CHAPTER 6
SCHWARZENEGGER AND THE FUTURE
From the beginning, relations between federal, state, and local governments and
sovereign Indian nations have been complex and evolving. The executive and legislative
branches have, through the years, promoted various Indian policies varying from coexistence to removal, from guardianship to assimilation, and from termination to selfdetermination. Through each stage, the judiciary has dominated in defining each
sovereign power’s rights and responsibilities in relation to one another. Court opinions
throughout the nineteenth and twentieth centuries, particularly the Marshall trilogy, laid
the foundation for later decisions on Indian nations and casino gaming. From the first
known attempt to open a casino on the Rincon reservation in San Diego County, to the
Cabazon and Morongo bands’ victory in the Supreme Court, California tribes led the
effort to legalize Indian gaming. Whether through court action, or direct democracy,
California’s tribes persevered through setbacks and obstacles and became the example of
success through unwavering determination.
Their strength and resolve produced Proposition 1A and legalized Indian gaming
in California today; the struggle, however, has not yet ended. California’s Indian gaming
remains in flux and still faces various obstacles. One challenge came from California’s
horse tracks and card clubs. These groups, that legally operate limited forms of
gambling, including Class II card games such as poker, argued the state unfairly granted
Indian tribes a monopoly on Class III gambling. Two separate court cases addressed
similar complaints that Proposition 1A violated both the Indian Gaming Regulatory Act
159
and equal protection guarantees of the U.S. Constitution. Larry Flynt, owner of Hustler
Magazine and the Hustler Casino in Gardena, filed suit that led to the California Court of
Appeals case of Flynt v. California Gambling Control Commission.1 In Northern
California, the owners of a card club filed a similar suit that the Ninth Circuit Court of
Appeals heard as Artichoke Joe’s California Grand Casino v. Norton.2 Plaintiffs argued
that section 2710 of IGRA “intended that such gaming would only take place in states
that permitted non-Indians to conduct similar gaming activities.”3 In their opinion, since
California had not previously granted other groups the right to conduct “such gaming,”
Proposition 1A went against Congress’ intent in IGRA. Further, Plaintiffs contended that
Proposition 1A’s guarantee of a “tribal monopoly on Class III gaming amounts to a racial
preference for Native Americans…” which infringed upon their rights to equal protection
under the Constitution.4
The two courts reached identical conclusions in ruling that Proposition 1A neither
contradicted congressional intent in IGRA nor violated the equal protection laws of the
Constitution. In reviewing its legislative history, the courts found that Congress did not
intend IGRA to “serve as a means of policing equality between Indian and non-Indian
gaming operations in the context of Class III gaming.”5 Rather, the purpose of the
compacting process was to balance tribal and state interests. Even if the “such gaming”
terminology used in section 2710 of IGRA was ambiguous, the courts were obliged to
1
Flynt v. California Gambling Control Comm., A098186 (Cal. App. 4th 2002).
2
Artichoke Joe’s Ca Grand Casino v. Norton, 353 F. 3d 712 (9th Cir. 2003).
3
Flynt, A098186 at § III (c).
4
Artichoke Joe’s, 353 F. 3d at 731.
5
Id. at 728.
160
follow the “trust doctrine” that ambiguous statutes involving Indian law were to be
construed in a manner that favors Indian tribes.6 As the Flynt court stated, “Quite simply,
Congress exhibited no desire to command states to enact gaming laws so that private,
non-Indian enterprises would enjoy the same rights as Indian tribes.”7 Having found that
Proposition 1A was consistent with the purposes of IGRA, the courts consequently
rejected the claims that it violated equal protection laws. In the opinion of both courts,
the preferential treatment exhibited towards Indian tribes was not racial in nature, but
political. Precedent established that states could make distinctions between various
political locales when deciding whether to impose stricter regulations or exempt certain
areas from state-wide bans on certain “vice activities” such as drinking, smoking,
prostitution, or gambling.8 Therefore, individual counties or cities within a state could
impose prohibitions against activities such as alcohol consumption and be labeled “dry”
without violating the constitution. Similarly, states, such as California, could permit a
particular political entity or locale, in this case Indian Nations, to permit an activity such
as gambling at the exclusion of other groups without compromising their constitutional
rights to equal protection. In both cases, the courts upheld the legality of Proposition 1A
and the right of California’s tribes to operate casinos.
Even with judicial confirmation of Proposition 1A’s legality, Indian gaming in
California continues to evolve. The most significant change has been from a uniform
compact for all of California’s gaming tribes to a multitude of compacts. As of August
6
Artichoke Joe’s, 353 F. 3d at 729.
7
Flynt, A098186 at § III (c).
8
Artichoke Joe’s, 353 F. 3d at 738.
161
2009, six new compacts and twelve amended compacts which differ from the original
model compact signed in 1999 have become effective. These compacts share many
common points including mandatory requirements of filing environmental impact reports
on any proposed projects, entering into memorandums of understanding with local
communities regarding impacts to environment and public safety including traffic, and
expanded roles for organized labor including the right to organize. 9 It is the economic
differences in these compacts however, that have been the greatest diversion from the
1999 compacts. In 2003, Governor Davis signed three new compacts with the La Posta
Band of Diegueno Mission Indians, Santa Ysabel Band of Diegueno Mission Indians, and
the Torres-Martinez Band of Cahuilla Mission Indians. Each of these compacts
contained provisions that greatly changed the basis for revenue sharing. Rather than
paying into the Revenue Sharing Trust fund or Special Distribution Fund, the three tribes
agreed to pay 5 percent of their net win directly to the State General Fund. 10 These
compacts started a trend in which the state looked for ways to gain greater payments from
tribes in exchange for the right to operate new casinos or to expand on existing ones.
In June of 2004, Governor Arnold Schwarzenegger renegotiated compacts with
five tribes. These new compacts granted the Pala Band of Mission Indians, the Pauma
Band of Luiseno Indians, the Rumsey Band of Wintun Indians, the Viejas Band of
Kumeyaay Indians, and the United Auburn Indian Community the right to operate an
unlimited number of slot machines and a ten year extension on their original compacts.
9
Charlene Wear Simmons, Gambling in the Golden State 1998 Forward (Sacramento: California
Research Bureau, 2006), 23.
10
La Posta and Torres-Martinez compacts at § 4.3.1. Note: the Torrez-Martinez compact allowed
for a gradual increase starting from 3 percent up to 5 percent after three years, whereas, the La Posta and
Santa Ysabel compacts required an immediate 5 percent payment.
162
In exchange for this exclusive right, the tribes promised a one-time payment of $1 billion
to pay for state transportation projects. To pay this money, the tribes pledged to sell
public bonds. They further agreed to pay additional fees for every slot machine over the
original base of 2000 machines. These fees were much higher than those under the Davis
compacts, ranging from $12,000.00 for the additional machines up to 2500, and
$25,000.00 for every machine over 4500. The tribes also agreed to submit to binding
arbitration relating to union issues, patron disputes, and off-reservation issues with local
governments.11
While the new compacts appeared as quick fixes to California’s budget woes, and
it is true that tribes had the sovereign right to negotiate individual compacts, the new
compacts portend serious long-term problems. The greatest threat is potential
factionalism and fighting between tribes. Many tribes immediately opposed the new
compacts believing Schwarzenegger had negotiated similar to Pete Wilson, ignoring the
majority of tribes to deal with a select few. Three tribes that signed with
Schwarzenegger, the Pala, Rumsey, and Viejas, were original signers of the Pala
Compact. Deron Marquez, chairman of the San Manuel Band of Mission Indians in San
Bernardino County called the deal a “slap in the face.”12 Pechanga Tribal Chairman
Mark Macarro, influential in passing Proposition 5 and Proposition 1A, viewed the
compact’s provision requiring binding arbitration as “an abrogation of our tribal
11
Hanh Kim Quach and John Gittelsohn, “Tribes Sign Compacts,” The Orange County Register,
22 June 2004.
12
James P Sweeney, “Governor, Five Tribes Sign Gambling Agreement With Wide Implications,”
Copley News Service, 21 June 2004.
163
sovereignty.”13 Rincon Tribal Chairman John Currier feared the real possibility that,
“These new gaming compacts will create a number of mega-casinos that could put
smaller tribes like Rincon out of business and force many of our tribal members back on
public assistance.”14
The purpose of Indian gaming is to foster economic development and security for
all of California’s tribes. It is true that we live in a free market society, and it is equally
true that tribal governments have the sovereign right to determine their own future;
however, tribal leaders must realize that Indian gaming can only succeed through a
cooperative effort. If Indian tribes become too factionalized and competitive with each
other, they will become counter-productive and could consequently cause their own
demise.
In September of 2004, the Schwarzenegger compacts took effect, but were
dependent upon the outcome of the November 2, 2004 election. Two initiatives,
Proposition 68 and Proposition 70 had the potential of once again transforming California
Indian gaming. If either proposition was approved, the Schwarzenegger compacts would
have become null and void. Card room and horse track owners, including Larry Flynt,
put Proposition 68 on the ballot. The proposed constitutional amendment would have
forced tribal casinos to pay “their fair share” of revenue to the state. This fair share
equaled 25 percent of the net win. Purporting to be concerned citizens that wanted to
help the state’s budget problem, the true motive behind this measure was the fact that if
13
Pechanga Band of Luiseno Indians, “Statement of the Honorable Mark Macarro Tribal Chairman
Pechanga Band of Luiseno Indians,” http://www.pechanga.net (accessed October 12, 2004).
14
Jake Henshaw, “Governor’s Plan Will Spawn ‘Megacasinos,’ Tribe Official Says,” Desert Sun,
29 June 2004.
164
tribes did not agree to pay the 25 percent, tracks and card rooms could have operated
30,000 slot machines.15 Proponents continued to portray their image as concerned
citizens by promising to give 33 percent of their profits to state and local governments in
order to assist educators, police officers, and firefighters. The terms of the proposition
also demanded changes to tribal compacts that would have submitted tribes to the
jurisdiction of state courts. The terms of the proposition were non-negotiable and were
set to go into effect unless every single tribe voluntarily agreed to them.16
Proposition 68 can be labeled as nothing other than a total and complete scam.
The backers of the initiative did not care about the contributions that Indian tribes made
to the state; they knew that California’s tribes would never agree to be forced into giving
25 percent of their net win, nor would they submit to blatant violations of tribal
sovereignty. These owners simply wanted to operate their own slot machines. Section
2(n) of Proposition 68 claimed that Indian tribes have attempted to purchase nonreservation lands in urban areas for the purpose of opening casinos. The text then stated,
“Gaming on these newly acquired lands would be detrimental to the surrounding
communities.”17 Yet the properties that would gain slot machines under Proposition 68
were almost entirely located within residential urban areas. These include Hawaiian
Gardens Casino, Hustler Casino, Commerce Casino, Los Alamitos Race Track and many
others which are located in metropolitan Los Angeles. It is hard to imagine any other
area of business or politics where an outside entity can attempt to force changes into a
15
“Text of Proposed Laws,” California Voter Information Guide, General Election, November 2,
2004, Proposition 68 at §§ 2(c), (d), 19(i).
16
Id. at § 2(d).
17
Id. at § 2(n).
165
legal contract in which they are not included. Proposition 68 clearly violated IGRA’s
intent, and its backers knew this. Section 2 (s) stated that the provisions of Proposition
68 would go into effect, “regardless of court decisions regarding Indian gaming,
regardless of changes in federal law, or regardless of any challenges or efforts by the
Indian tribes or others to delay or circumvent this act.”18 It appears that the authors of
this initiative believed that they were omnipotent and could ignore federal law or court
orders.
The second proposed initiative, Proposition 70, provided a more realistic option to
appease those calling for a greater contribution from Indian tribes. In exchange for the
exclusive right to operate unlimited Class III gaming including craps and roulette, those
tribes that amended their compacts would pay a portion of their net win that is equivalent
to the corporate tax rate under the state’s Revenue and Taxation Code, equaling 8.84
percent.19 This amount would be in addition to the monies that tribes already paid under
Proposition 1A. Contrary to opponents’ claims that tribes would not be subject to audits,
that they would place casinos in urban environments, and that tribal governments would
not be subject to conducting environmental impact reports, Proposition 70 would have
ensured that each of these issues were adequately addressed.20 Proposition 70 would not
have changed the portions of Proposition 1A that provide the state access to financial
records or the requirement that casinos only be located on tribal lands. Additionally,
section 19.2 of Proposition 70 clearly stated that tribes must prepare environmental
18
“Text of Proposed Laws,” Proposition 68 at § 2(s).
19
“Text of Proposed Laws,” California Voter Information Guide, General Election, November 2,
2004, Proposition 70 at § 19.1.
20
“Argument Against Proposition 70,” California Voter Information Guide, General Election,
November 2, 2004.
166
impact reports that “meet the objectives of the National Environmental Policy Act and
the California Environmental Quality Act…”21
Opponents also feared that Proposition 70’s addition of new games and unlimited
slot machines would spawn “mega-casinos.” First, adding craps or roulette would have
been no more than an aesthetic change to California’s casinos. Many tribes already
offered those games in modified forms. Because Proposition 1A only approved slot
machines and house banked card games, casinos have ingeniously found ways to play
craps and roulette with cards. The games are essentially the same; changing the
Constitution to permit these games would have only allowed casinos to offer the
traditional form of the game rather than the modified one. Second, Governor
Schwarzenegger’s previously signed compacts granted unlimited slot machines to five
tribes, so mega-casinos were already a possibility. The difference in Proposition 70 is
that it would have granted every tribe the chance to have a uniform compact. Proposition
70 was a fair alternative to Proposition 68 and the governor’s compacts. Its only
downside was that the amended compacts would be extended for ninety-nine years. The
uncertainty that, if any unforeseen problems arose from the compacts, there may be no
way to abrogate them, led to great opposition.
Both Proposition 68 and 70 were crushed at the polls. Over 76 percent of voters
were against Proposition 70 and over 83 percent voted no on Proposition 68. 22 The
defeat of Proposition 68 solidified the Pala, Pauma, Rumsey, Viejas, and United Auburn
21
“Text of Proposed Laws,” Proposition 70 at § 19.1.
22
California Secretary of State, “November 2004 General Election Results,”
http://www.sos.ca.gov/elections/sov/2004_general/formatted_ballot_measures_detail.pdf (accessed March
14, 2009).
167
compacts; however, as Governor Schwarzenegger continued to negotiate new and
amended compacts, outside influences would begin to affect both the implementation of
negotiated contracts and the rate at which tribes desired to enter into these compacts.
In August of 2006, Governor Schwarzenegger negotiated amended compacts with
four of Southern California’s largest gaming tribes: Pechanga, Morongo, Sycuan, and
Agua Caliente. The amended compacts allowed for 3,000 additional slot machines over
the 1999 limit of 2,000 for the Sycuan and Agua Caliente tribes and 5,500 additional
machines for the Pechanga and Morongo tribes. The compact lasted through December
31, 2030, and increased each tribe’s payment to the Revenue Sharing Trust Fund to $2
million dollars per year for Pechanga, Morongo and Agua Caliente, and $3 million per
year for Sycuan payable in quarterly installments. Each tribe also agreed to pay annual
payments to the state general fund ranging from $23 million to $45 million per year for
the first 2,000 machines. Further, an escalator clause was included requiring additional
payments to the state general fund of 15 to 25 percent of net win for all machines in
excess of the first 2,000. 23
In June 2007, the California State Legislature passed Senate Bills 903 (Pechanga),
174 (Morongo), 175 (Sycuan), and 957(Agua Caliente) which approved the compacts
with the tribes. The compacts were set to go into effect on January 1, 2008, however,
Jack Gribbon of Unite-Here, the same labor group that sued and overturned Proposition
5, desired stronger organizing rights than what was outlined in the compact. Gribbon
hoped to have the compacts rejected; he therefore filed a referendum and collected
23
California Secretary of State, “2008 Official Voter Information Guide,”
http://www.primary2008.sos.ca.gov/voterguide/analysis/prop_94_analysis.html (accessed March 14, 2009).
168
enough signatures to put approval of the compacts to a public vote. 24 Propositions 94
(Pechanga), 95 (Morongo), 96 (Sycuan), and 97 (Agua Caliente) were placed on the
California Presidential Primary Election ballot held on February 5, 2008. Each
proposition passed with 55.5 percent of voters approving. 25 This event however, set
another potential hurdle for future tribes seeking new or amended compacts. Not only do
tribes have to negotiate with the state, if they sign a compact, it has to be approved by the
legislature and potentially could be forced to a public vote. This puts tribes at a greater
disadvantage and clearly has evolved beyond IGRA’s intent.
Another impediment to tribal self sufficiency and sovereignty came from the
Department of the Interior’s (DOI) denial of land trust applications to the Los Coyotes
Band of Cahuilla and Cupeño Indians and the Big Lagoon Rancheria of Chemeheuvi
Indians. Both groups were located on very remote lands. The Los Coyotes reservation is
located in mountainous terrain surrounded by national forests, and only received
electricity in 1998. Under the Bush administration, DOI had approved taking land up to
300 miles from a tribe’s reservation into trust for gaming purposes. The City of Barstow
initially approached the Los Coyotes band and Governor Schwarzenegger asked the band
to include the Big Lagoon Rancheria in their plans for opening gaming facilities in
Barstow. In 2005, both groups signed compacts with the governor and began working
with DOI on taking land in Barstow into trust. The initial application was filed in March
24
James P Sweeney, “Indian casino union formed in Conn. not a sure bet in Calif.” Copley News
Service, 24 December 2007.
25
California Secretary of State, “February 2008 Primary Election Results,”
http://www.sos.ca.gov/elections/sov/2008_primary/contents.html (accessed June 1, 2009).
169
of 2006, a public hearing was held in May of 2006, and environmental impact reports
were completed in 2007 and submitted to DOI for final review. 26
On January 3, 2008, in a controversial move, Secretary of the Interior Dirk
Kempthorne sent letters denying requests to take land into trust to several tribes
throughout the nation including the Los Coyotes and Big Lagoon tribes. The letters
exemplified the Secretary of Interior’s complete lack of comprehension of IGRA’s intent.
The opening paragraph of the letters showed that the department’s concern was not with
the well-being of Indian peoples, but was in addressing their own administrative
problems: “Processing these applications is time-consuming and resource-intensive in an
area that is constrained by a large backlog and limited human resources.” Kempthorne
declared that the 1934 Indian Reorganization Act regulated the acquisition of trust lands
and that it “has nothing directly to do with Indian gaming.” While there may not be a
direct connection, especially given the fact that IRA was written in 1934 prior to Indian
gaming, the Secretary completely missed the issue that IGRA was designed to promote
tribal self-sufficiency and therefore makes acquisition of trust lands an integral part of
achieving this goal. Kempthorne further stated that a major benefit of off-reservation
gaming facilities is the opportunity for tribal employment. He reasoned that if a casino
was too far from a tribe’s reservation it would prevent the opportunity for tribal members
to seek employment and would require residents to leave the reservation for extended
period of time resulting in “serious and far-reaching implications for the remaining tribal
26
Tom Shields, “Tribe Blasts Secretary of Interior for Illegal Denial of Land into Trust
Application,” Los Coyotes Band Press Release, 6 January 2008.
170
community.” 27 Secretary Kempthorne’s complete lack of understanding that revenue
from these off-reservation casinos would have brought individuals and their families out
of poverty is dumbfounding. As of August 2009, several groups are considering
initiating legal action.
Currently the biggest obstacle to expansion of Indian gaming in California is the
recession which began in 2007. Governor Schwarzenegger last signed an amended
compact on June 30, 2008, with the Shingle Springs Band of Miwok Indians. Since that
time, the economic meltdown on a world-wide basis has directly affected Indian gaming
in California. Unlike past years in which either the state or tribes attempted to alleviate
state budgetary issues by amending or creating new compacts, the expansion of Indian
gaming has been minimal. Two explanations can be given for this fact. First, the state
has come to the realization that Indian Gaming may not be the savior to state budgetary
problems. In Fiscal Year 2004-2005, the state expected new and amended compacts to
generate $300 million dollars for the General Fund. The actual amount received was
only $35 million dollars an over estimate of $265 million dollars nearly 90 percent less
than expected. The state had made their estimate based on an assumption that each tribe
would immediately operate the maximum allotment of machines; however, many tribes
did not increase their slots as rapidly as expected. 28 Second, the economy has hit tribes
hard. Despite the common belief that so called “vice activities” increase during hard
27
Dirk Kempthorne, Secretary of the Interior, Letter to Regional Directors, Bureau of Indian
Affairs, 3 January 2008.
28
Simmons, Gambling in the Golden State, 52.
171
times, revenues in Indian casinos have fallen. 29 The Sycuan, who spent several years and
over $6 million to amend their compact and expand operations, withheld final approval of
the amended compact and walked away. Rather than implementing employee layoffs due
to the recession, Sycuan leaders decided that the additional mandatory payments were
simply too much to bear. 30 The decision cost the state millions and potentially could cost
Sycuan multi-millions of dollars in unrealized profits. With double digit loses, Indian
tribes have taken their foot off of the gas, but when the economy recovers, it is expected
that tribes will continue the effort to expand Indian gaming in California. 31
Indian gaming in California will continue to evolve. The most important issue for
California’s tribes to guarantee a successful and prosperous future is maintaining a good
public image. Regardless of tribal sovereignty, Indian casinos are reliant upon the people
of California who, as a voting populace, are very unpredictable. Although recent trends
have been to vote for Democratic presidents, voters overwhelmingly recalled a
Democratic governor and replaced him with a Republican celebrity. Public image was a
major factor in this action. If Indian casinos have a poor public image, voters may favor
29
It is interesting to note that California Lottery sales have declined at the same time as casino
revenues have. Opponents to Indian gaming, such as Justice Stevens in the Cabazon decision, have often
claimed that Indian casinos take away revenue that would have otherwise gone to the state lottery. Statistics
from the California Lottery prove this assertion to be false. In 1999/2000, the year California legalized
Indian Gaming, California Lottery revenues were around $2.6 billion. From 2003 to 2006, the lottery set
records with revenues topping out at over $3.5 billion. During the recession those numbers have come
down to just over $3 billion in 2008. While the increase and decrease in revenue may not be as high as that
of Indian gaming the overall trend is comparable. Gambling goes up and down with the economy and
Indian casinos have not negatively impacted the California Lottery. See appendices D & E.
30
James P Sweeney, “Sycuan walks away from gambling compact,” San Diego Union Tribune, 4
December 2008.
31
Mary Lynne Vellinga, “California’s Indian casinos see gamblers spend less,” Sacramento Bee,
18 January 2009.
172
adverse initiatives or they could simply withhold their patronage. Unlike other states,
Californians have easy access to Class III casinos in Nevada.
To maintain a good public image, tribal casinos must address a few important
issues. First, tribal factionalism and fighting amongst tribes must cease. California’s
tribes must be united in public regardless of sovereignty. Groups cannot continue to
negotiate contracts at the expense of others, something often reported negatively by the
media. Public images of greed negates the idea that casino gaming is intended to relieve
poverty among all California Indians. Second, another negative blot on gaming derives
from publicized stories of tribal members being banished.32 In October of 2005, 31,623
members of California gaming tribes shared in a net win of over $5.7 billion. This
equates to a net annual share of $188,000 per member. 33 Tribes have the sovereign right
to settle internal matters, but if these matters are publicized, one conclusion triumphs
above all others in the general public’s mind: the member was banished to circumvent the
sharing of casino profits. 34 Regardless of the truth, the public’s perception is what’s
important.
The California Gambling Control Commission reports some tribes fail to pay their
required share of net winnings to the Revenue Sharing Trust Fund (RSTF) on a timely
basis. Before the passage of Assembly Bill No. 673 in 2003, fund shortfalls resulted in
payments to non-compact tribes being lower than their entitlement. After passage of 673,
shortcomings are covered by monies from the Special Distribution Fund (SDF), which
32
Juliana Barbassa, “Court To Hear Tribal Exile Case,” The Orange County Register, 8 August
33
Simmons, Gambling in the Golden State, 56.
34
Jim Marino, “Who is a Native American Indian,” The Santa Ynez Valley Journal, 25 June 2009.
2004.
173
then results in less money for local governments.35 Either way, Indian tribes are viewed
as not fulfilling their obligations. Payments to the fund must be made on time; the public
accepts no excuses. Additionally, since 2004 no new or amended compacts have
provided for payments to the SDF. Under current law, the state is under no obligation to
fund the RSTF from General Fund monies. If this trend continues in the future,
Schwarzenegger’s compacts will have created the potential to completely exhaust all
resources in the SDF. Since this is now the primary funding source for shortfalls in the
RSTF, there is a great danger that those non-compact tribes that are in the most need of
assistance will not receive the $1.1 million annual payments promised to them under the
1999 compacts. All parties must address this issue.
Finally, Indian casinos must continue to address problem gambling, which is a
disease that afflicts up to one million Californians. To their credit California’s tribes
have contributed over $3 million to the state’s Office of Problem Gambling. This far
outpaces California State Lottery contributions; totaling only $65,000.00 per year during
the office’s six year span from 1999 to 2004 despite $40 billion in ticket sales since the
lottery’s creation in 1984 to 2004.36 Prevention programs, literature, limits on the
availability of finances through credit or automatic teller machines, and even granting
casino employees power to stop further gambling have been included in the most recent
compacts with the Yurok Tribe in 2007 and the Shingle Springs Band of Miwok Indians
35
California Gambling Control Commission, “Indian Gaming Special Distribution Fund and
Indian Gaming Revenue Sharing Trust Fund Supplemental Report to Legislature per Assembly Bill 673,
Chapter 210, Statutes of 2003 (Government Code section 12012.90),”
http://www.cgcc.ca.gov/rstfi/Indian%20Gaming%20Special%20Distribution%20Fund_042804.pdf.
(accessed October 23, 2004).
36
Robert Salladay, “Scant Attention For a Gambling Byproduct,” Los Angeles Times, 3 August
2004.
174
in 2008. 37 Even if the problem gambler gets more money, or moves to another casino to
continue gambling, it is the image of the Indian casino trying to help that matters most. If
the public believes rates of problem gambling and subsequent consequences, such as
higher rates of crime and suicide, are increasing due to tribal casinos, their opposition to
Indian gaming will increase.
The legal history of Indian gaming nationwide and particularly in California has
been one of complexity and continued change. Indian gaming in California will continue
to evolve throughout the lifetime of the current tribal-state compacts and will adjust to
shifts in the political, legislative, or judicial realms. Its survival is important as Indian
gaming continues to bring California’s native population out of the depths of poverty and
into the reach of prosperity. Funds from Indian gaming have provided basic needs such
as water, electricity, and sewage. They have also created health care, educational, and
vocational programs that were previously unaffordable. Indian gaming has provided
valuable assistance to governments on the state and local level. As of September 2005,
over $543 million in combined payments has been paid to the RSTF, SDF, and General
Funds. 38 Despite many setbacks and tremendous obstacles, California’s Indian tribes
have succeeded in their quest for legalized Indian gaming. By maintaining open and
amicable relationships with state and local officials on a sovereign-to-sovereign basis and
by cultivating a positive public image, Indian gaming should continue to thrive and
further the goals of self-sufficiency and self-determination for California’s Indian tribes
for generations to come
37
Shingle Springs compact at § 8.5 and Yurok compact at § 9.1(p).
38
Simmons, Gambling in the Golden State, 56.
175
APPENDIX A
CALIFORNIA’S GAMING TRIBES1
Agua Caliente Band of Cahuilla Indians
Alturas Indian Rancheria
Augustine Band of Cahuilla Mission Indians
Barona Group of Capitan Grande Band of Mission Indians
Bear River Band of the Rohnerville Rancheria
Berry Creek Rancheria of Maidu Indians
Big Sandy Band of Western Mono Indians
Big Valley Band of Pomo Indians
Bishop Paiute Tribe
Blue Lake Rancheria
Cabazon Band of Mission Indians
Cachil Dehe Band of Wintun Indians of the Colusa Indian Community
Cahto Tribe of the Laytonville Rancheria
Cahuilla Band of Mission Indians of the Cahuilla Reservation
Campo Band of Diegueno Mission Indians of the Campo Indian Reservation
Chemehuevi Indian Tribe of the Chemehuevi Reservation
Cher-Ae Heights Indian Community of the Trinidad Rancheria
Chicken Ranch Rancheria of Me-Wuk Indians
1
This list is comprised from a combination of two lists, one provided from the National Indian
Gaming Commission at http://www.nigc.gov, and the other from the California Gambling Control
Commission at http://www.cgcc.ca.gov.
176
Coyote Valley Band of Pomo Indians
Dry Creek Rancheria Band of Pomo Indians
Elk Valley Rancheria
Fort Independence Indian Community of Paiute Indians of the Fort Independence
Reservation
Fort Mojave Indian Tribe
Hoopa Valley Tribe
Hopland Band of Pomo Indians
Jackson Rancheria Band of Me-Wuk Indians
La Posta Band of Diegueno Mission Indians of the La Posta Indian Reservation
La Jolla Band of Luiseno Mission Indians of the La Jolla Reservation
Lytton Rancheria of California
Middletown Rancheria of Pomo Indians of California
Mooretown Rancheria of Maidu Indians of California
Morongo Band of Cahuilla Mission Indians of the Morongo Reservation
Pala Band of Luiseno Mission Indians of the Pala Reservation
Paskenta Band of Nomlaki Indians of California
Pauma Band of Luiseno Mission Indians of the Pauma- Yuima Reservation
Pechanga Band of Luiseno Mission Indians of the Pechanga Reservation
Picayune Rancheria of Chukchansi Indians
Pit River Tribe
Quechan Indian Tribe
Redding Rancheria
177
Rincon Band of Luiseno Mission Indians of the Rincon Reservation
Robinson Rancheria of Pomo Indians
Round Valley Indian Tribes of Round Valley Reservation
Rumsey Indian Rancheria of Wintun Indians of California
San Manuel Band of Serrano Mission Indians
San Pasqual Band of Diegueno Mission Indians of California
Santa Rosa Indian Community of the Santa Rosa Rancheria
Santa Ynez Band of Chumash Mission Indians of the Santa Ynez Reservation
Santa Ysabel Band of Diegueno Mission Indians of the Santa Ysabel Reservation
Sherwood Valley Rancheria
Shingle Springs Band of Miwok Indians
Smith River Rancheria
Soboba Band of Luiseno Indians
Susanville Indian Rancheria
Sycuan Band of the Kumeyaay Nation
Table Mountain Rancheria
Torres Martinez Desert Cahuilla Indians
Tule River Tribe of the Tule River Reservation
Tuolumne Band of Me-Wuk Indians of the Tuolumne Rancheria
Twenty Nine Palms Band of Mission Indians
United Auburn Indian Community of the Auburn Rancheria
Viejas Group of Capitan Grande Band of Mission Indians of the Viejas Reservation
178
APPENDIX B
GROWTH IN INDIAN GAMING
Source: National Indian Gaming Commission1
1
Graph taken from the National Indian Gaming Commission website at http://www.nigc.gov.
179
APPENDIX C
NATIONAL INDIAN GAMING COMMISSION
TRIBAL GAMING REVENUES 2004-20081
1
Chart taken from the National Indian Gaming Commission website at http://www.nigc.gov.
180
181
APPENDIX D
National Indian Gaming Commission
Tribal Gaming Revenues (in thousands) by Region
Fiscal Years 1999-20081
1
Charts taken from the National Indian Gaming Commission website at http://www.nigc.gov.
Some charts appear differently due to formatting of NIGC website.
182
183
184
185
APPENDIX E
CALIFORNIA STATE LOTTERY REVENUES 2000-20081
YEAR
Revenue Amount
previous year
2007/2008
$3,049,620,915
2006/2007
$3,318,346,505
2005/2006
$3,584,996,251
2004/2005
$3,333,620,669
2003/2004
$2,973,975,717
2002/2003
$2,781,569,856
2001/2002
$2,896,372,533
2000/2001
$2,894,481,523
1999/2000
$2,598,378,990
Percentage Increase (Decrease) over
(8.10%)
(7.44%)
7.54%
12.09%
6.92%
(3.96%)
0.07%
11.40%
N/A
1
Information gathered from California Lottery website at http://www.calottery.com. The purpose
of this chart is to show that Indian Gaming has not had a negative effect on the California Lottery. While
the growth of Indian Gaming may have outpaced that of the lottery, lottery revenues have not decreased as
a result of Indian Gaming. Lottery revenues decreased as a result of the economic recession beginning in
2007 similarly to revenues of California’s Indian Casinos as exhibited in Appendix D.
186
APPENDIX F
STATEWIDE TRIBAL GAMING DEVICE COUNT 20061
1
Chart taken from the California Gambling Control Commission website at
http://www.cgcc.ca.gov
187
188
APPENDIX G
CALIFORNIA GAMBLING CONTROL COMMISSION REVENUE SHARING
TRUST FUND RECIPIENTS MAY 28, 20091
1
Chart taken from the California Gambling Control Commission website at
http://www.cgcc.ca.gov
189
190
191
192
193
APPENDIX H
TRIBES CURRENTLY CONTRIBUTING TO THE INDIAN GAMING SPECIAL
DISTRIBUTION FUND NOVEMBER 19, 20081
1
Chart taken from the California Gambling Control Commission website at
http://www.cgcc.ca.gov
194
195
APPENDIX I
TRIBES CURRENTLY CONTRIBUTING TO THE GENERAL FUND MARCH 4,
20091
1
Chart taken from the California Gambling Control Commission website at
http://www.cgcc.ca.gov
196
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204
VITA
Graduate College
University of Nevada, Las Vegas
Aaron Mitchell Nicholas Peardon
Degrees:
Bachelor of Arts, History 1998
Pepperdine University
Special Honors and Awards: Dean’s List 1998, Phi Alpha Theta 1996-2000
Thesis Title: A Legal History of Indian Gaming in California
Thesis Committee:
Chairperson, Maria Raquel Casas, Ph. D.
Committee Member, David Tanenhaus, Ph.D.
Committee Member, William Bauer, Ph. D.
Committee Member, John Tuman, Ph. D.
205